Baja California - Despite a lack of recognition abroad and a drug war that has made tourists flee, Mexico's winemakers see cause to celebrate as drinking habits evolve in the land of tequila.

Production increased almost 40 percent in the past five years, causing cheer at last month's annual Vendimia harvest festival in Baja California, where 90 percent of Mexico's wine is produced.

The two-week fiesta was expected to welcome more than 30,000 visitors to some 40 concerts, wine-tastings and contests around vineyards lying just over an hour's drive south of the border city of Tijuana.

"People have only just started to drink wine and to learn about it. So promoting it, educating people and holding these kinds of events are essential so that they feel more confident," said Hans Backoff, director general of the Monte Xanic winery in the Guadalupe Valley.

An ideal mix of sunshine, sea breezes and cool nights attracted the first winemakers, Spanish missionaries, to the Baja California peninsula over 300 years ago.

But Mexican wines only started to win acclaim more recently.

The industry faced protectionist laws from Spain in 1699 to ban wine production in its colonies. The Bodegas de Santo Tomas winery was the first to reactivate larger scale production after the 1810-21 war of independence, in 1888, and still exists today.

Wine making increased in the region in the last century, but the removal of trade barriers in the late 1980s opened the market to foreign competition and production sunk again.

At around the same time a group of wine lovers, including Hans Backoff senior, the father of the current head of Monte Xanic, decided to focus on making better wines.

It was the start of a boom in boutique wine-making in the region, which includes San Antonio de las Minas, where the Guadalupe valley lies, the San Vicente Valley and the Santo Tomas Valley.

"It all changed pretty fast. It went from barely drinkable wines to drinkable wines to a lot of wines of good quality to some excellent wines," said Steve Dryden, a US wine writer who lives in the region. "Wines that are undervalued."

One dynamic winemaker, Hugo D'Acosta, set up a school with short courses for aspiring winemakers, attracting locals from doctors to farmers.

Some have since branched into food sales, concert venues and other attractions to lure tourists to a wine route which starts in the port city of Ensenada.

Those who can afford it have invested in machinery from Italy or oak barrels from France and the United States and advice from top enologists, helping them win top wine awards.

Agronomist Antonio Escalante celebrates the 10th year of the Roganto winery this year, with a production of 10,000 cases, up from 125 in the first year.

The wealthy water well driller, who works with four people, has attracted a growing following.

Like many wineries here, the company started buying grapes from established vineyards before planting its own.

A wide selection flourishes in the region, including tempranillo, syrah or nebbiolo, and winemakers often mix varieties.

But it is still a challenge to succeed.

Water supplies are limited, the arid soil can be salty, and government taxes on the industry are around 40 percent.

Escalante said wine makers struggle to compete with subsidized wines from Chile or Argentina.

"Obviously they are wines that are undervalued and that causes a lot of damage to the industry. We'd like the government to help us with that," Escalante said.

Nevertheless, an increase in wine drinking has provided a boost to the industry in a country where tequila and beer have long been the preferred drinks at festivities.

Although still small, wine consumption has almost doubled in the past 10 years. The National Wine Council, or Consejo Mexicano Vitivinicola, predicts it will double again by 2015.

At the same time, tastings and courses have sprung up in big cities and wine regions.

Attending a festival concert, chemical engineer Lourdes Reyes said she recently took a wine course and was now taking her hobby further.

"We've started meeting up with friends just to drink wine and we've tried wines from all over the world: Mexican, Chilean, Argentinian. I think that interest for wine has changed," Reyes said.