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Jerez has been a centre of viniculture since wine-making was introduced to Spain by the Phoenicians in 1100 BC. The practice was carried on by the Romans when they took control of Iberia around 200 BC. The Moors conquered the region in AD 711 and introduced distillation, which led to the development of brandy and fortified wine. During the Moorish period, the town was called Sherish from which both Sherry and Jerez are derived. Wines similar in style to Sherry have traditionally been made in the city of Shiraz in mid-southern Iran, but it is thought unlikely that the name derives from there. Wine production continued through five centuries of Arab Empire’s rule. In 966, Al-Hakam II, the second Caliph of Córdoba, ordered the destruction of the vineyards, but the inhabitants of Jerez appealed on the grounds that the vineyards also produced raisins to feed the empire’s soldiers, and the Caliph spared two-thirds of the vineyards.

In 1264 Alfonso X of Castile took the city. From this point on, the production of Sherry and its export throughout Europe increased significantly. By the end of the 16th century, Sherry had a reputation in Europe as the world’s finest wine. Christopher Columbus brought Sherry on his voyage to the New World and when Ferdinand Magellan prepared to sail around the world in 1519, he spent more on Sherry than on weapons. Sherry wine became very popular in Great Britain, especially after Francis Drake sacked Cadiz in 1587. At that time Cadiz was one of the most important Spanish sea ports, and Spain was preparing an armada there to invade England. Among the spoils Drake brought back after destroying the fleet were 2,900 barrels of Sherry that had been on shore waiting to be loaded aboard Spanish ships. This helped to popularize Sherry in the British Isles.

Spanish producers have registered the names Jerez / Xérès / Sherry and will prosecute producers of similar fortified wines from other places using the same name. In 1933, Article 34 of the Spanish Estatuto del Vino (Wine Law) established the boundaries of Sherry production as the first Spanish wine denominación. Today, Sherry’s official status is further recognized by wider EU legislation. Sherry must come from the triangular area of the province of Cádiz between Jerez de la Frontera, Sanlúcar de Barrameda, and El Puerto de Santa María. However the name « Sherry » is used as a semi-generic in the United States where it must be labeled with a region of origin such as American sherry or California sherry. However such wines cannot be exported to the EU. Australian wine makers now use the term Apera instead of Sherry,[16] whilst Australian consumers still use the term Sherry. As of December 31, 2013 the term Apera is now also used by Canadian wine makers.

Sherry is then aged in the solera system where new wine is put into wine barrels at the beginning of a series of three to nine barrels. Periodically, a portion of the wine in a barrel is moved into the next barrel down, using tools called the canoa (canoe) and rociador (sprinkler) to move the wine gently and avoid damaging the layer of flor in each barrel. At the end of the series only a portion of the final barrel is bottled and sold. Depending on the type of wine, the portion moved may be between five and thirty percent of each barrel. This process is called « running the scales » because each barrel in the series is called a scale. Thus, the age of the youngest wine going in the bottle is determined by the number of barrels in the series, and every bottle also contains some much older wine than is stated. Sherry is aged in the solera for a minimum of 3 years.