By Will Smale BBC News Online business reporter

Rioja's grapes usually enjoy a lot of sunshine

"I would happily put my wines up against any from around the world," he says, his bushy moustache bobbing up and down happily, at a Rioja wine tasting in London. "Yes, bring it on."

As more than one hundred happy wine tasters sniff, slurp and seemingly gargle on the 120 Riojas on display in a plush function room at the Tower of London, Mr Martinez insists that "in such an international marketplace as today, a wine needs its own personality.

"I prefer the personality of Rioja wines, and yes, mine in particular."

Mellow oak

Mr Martinez's comments reflect a renewed confidence across the whole of the famous Rioja winemaking region in northern Spain, an area which until a decade ago was seen as terribly old-fashioned.

The wines were certainly a lot more oaky 20 years ago. Now people want a lot more fruit and elegance Jose Saenz Vergara, Bodegas Tobia

Despite being much loved by many; Rioja's traditional red wines, mellowed and sweetened after a good many years in oak barrels, were losing sales to the burgeoning popularity of New World rivals.

Rioja's reds, whose fruit had always played a very distant second fiddle to the dominant sweet, vanilla notes of the oak, were falling foul of changing tastes.

Wine drinkers, particularly those in the UK - its key export market - were switching to the more fruit-driven wines of Australia, Chile and America.

Producers in Rioja, like those in neighbouring France, were faced with a dilemma - move with the times or stick stubbornly to their guns.

Sales boost

Rioja decided to modernise and introduce more fresh fruit flavours, while France, whose red wines can offer almost zero fruit, did not.

Each and every Rioja bottle will include the Rioja seal of authenticity

The result is that Rioja sales are now booming, while France is continuing to see a much publicised drop in sales, with the latest French figures showing another 10% fall in exports between January and May of this year.

By contrast, Rioja exports to the UK increased by 11.5% in volume to 7.8 million litres in the first five months of 2004, up from 6.63 million litres in the same period last year.

And 2003 was overall Rioja's best-ever performance in the UK, with sales of more than 86m euros ($104m; �55.5m).

Yet judging by the recent Rioja tasting in London; far from ditching all their traditional flavours, they are still there as bold as ever, just fleshed out with a wealth of additional fruit and elegance. Even the wines of the more proudly traditional producers.

As a model for how businesses can successfully move with the times, but not at the expense of their traditional qualities, it is a very useful example.

Distinct flavours

"It is amazing in a way the change," says Jose Saenz Vergara of producer Bodegas Tobia.

"The wines were certainly a lot more oaky 20 years ago. Now people want a lot more fruit and elegance."

For Mr Martinez, who has been exporting his Don Jacobo Riojas to the UK for more than two decades, it is about balance.

"Yes, you must respond to your consumer's changing tastes, but you must never be a slave to fashion," he says.

"In such an international marketplace a wine needs its own personality. Drinkers do not want all wines to taste the same."

Lager encroachment

But despite all the positive developments in Rioja, its wine makers still face a few hurdles.

Long oak aging has always been a key Rioja characteristic

Perhaps the main one is a decline in wine consumption among young Spanish people who have moved more towards beer drinking, and more specifically the heavily-advertised lagers.

In a wine region where many of the producers buy in extra grapes from individual farmers, the Rioja Regulatory Council admits there can occasionally still be disputes over the prices to be paid.

And for an area where the weather can sometime be too hot - such as last year - the vagaries of the weather can still damage some grapes.

Yet with the Rioja Regulatory Council introducing production limits to avoid the wine gluts that have recently hit Australia and the US, and producers allowed to experiment on a small scale with such non-Spanish grape varieties as Cabernet Sauvignon and Shiraz, the industry remains in the main both confident and forward thinking.

Personality

The Rioja Regulatory Council's Tom Perry says the sales curve is steadily moving in the right direction.

"Rioja wines have always been much loved, but the styles, certainly for the export markets, have changed," he says.

"In addition to the more traditional styles we have created newer, more contemporary types of wine, and we like to think our wines have a very wide appeal.

"The wine industry has been turned on its head by the big New World companies and their huge marketing campaigns and brands, but our sales are growing steadily and we are very optimistic about the future."

Or as Mr Martinez would say, Rioja wines may have moved with the times, but they have certainly not lost their Spanish personality.