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Creating Wine

Creating Wine: The Emergence of a World Industry, 1840-1914

James Simpson
Copyright Date: 2011
Pages: 344
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  • Book Info
    Creating Wine
    Book Description:

    Today's wine industry is characterized by regional differences not only in the wines themselves but also in the business models by which these wines are produced, marketed, and distributed. In Old World countries such as France, Spain, and Italy, small family vineyards and cooperative wineries abound. In New World regions like the United States and Australia, the industry is dominated by a handful of very large producers. This is the first book to trace the economic and historical forces that gave rise to very distinctive regional approaches to creating wine.

    James Simpson shows how the wine industry was transformed in the decades leading up to the First World War. Population growth, rising wages, and the railways all contributed to soaring European consumption even as many vineyards were decimated by the vine disease phylloxera. At the same time, new technologies led to a major shift in production away from Europe's traditional winemaking regions. Small family producers in Europe developed institutions such as regional appellations and cooperatives to protect their commercial interests as large integrated companies built new markets in America and elsewhere. Simpson examines how Old and New World producers employed diverging strategies to adapt to the changing global wine industry.

    Creating Wineincludes chapters on Europe's cheap commodity wine industry; the markets for sherry, port, claret, and champagne; and the new wine industries in California, Australia, and Argentina.

    eISBN: 978-1-4008-3888-2
    Subjects: Economics, Technology, Business

Table of Contents

  1. Front Matter
    (pp. i-vi)
  2. Table of Contents
    (pp. vii-x)
  3. List of Illustrations
    (pp. xi-xii)
  4. List of Tables
    (pp. xiii-xiv)
  5. Acknowledgments
    (pp. xv-xvi)
  6. Maps
    (pp. xvii-xxx)
  7. Introduction
    (pp. xxxi-xxxviii)

    Wine is not a homogenous product. A bottle from one of Bordeaux’s first growths of the 2000 vintage today sells for several thousand dollars, much more than virtually any other wine, not just for that particular vintage, but also those produced on the same estates in previous and later years. Like most readers of this book, I have never drunk such a wine and probably never will, but I still get great pleasure from drinking more modest ones. A current favorite for everyday drinking is Táula’s Damana 2006crianza, which my local shop sells for around fifteen euros, or twenty...

  8. Weights, Measures, and Currencies
    (pp. xxxix-xl)
  9. Acronyms and Abbreviations
    (pp. xli-xlii)
  10. Part I: Technological and Organizational Change in Europe, 1840–1914

    • [PART I Introduction]
      (pp. 1-2)

      For thousands of years wine has been widely produced and drunk in western Europe. Traditional preindustrial economies often had high levels of underemployment, which made the vine attractive as it provided considerable employment opportunities during “all seasons, to all ages and both sexes.”¹ According to the French historian Le Roy Ladurie, the “classic response of Mediterranean agriculture to a rise in population” was to “plant trees or vines on old or new assarts, thereby increasing the returns from agriculture by more intensive forms of land utilization.”² This essentially Malthusian vision assumes that output at best grew with population growth and...

    • Chapter 1 European Wine on the Eve of the Railways
      (pp. 3-29)

      Wine was an integral part of the population’s diet in much of southern Europe. In France on the eve of the railways, there were reportedly over one and a half million growers in a population of thirty-five million. High transport costs, taxation, and poor quality all reduced market size, and most wines were consumed close to the place of production. Volatile markets also forced most growers to combine viticulture with other economic activities. Alongside the production of cheap table wines, a small but highly dynamic sector existed that specialized in fine wines to be sold as luxury items in foreign...

    • Chapter 2 Phylloxera and the Development of Scientific Viti-Viniculture
      (pp. 30-57)

      Europe’s growers, winemakers, and merchants had to adapt to a series of important exogenous shocks in the half century prior to the First World War. On the demand side, the decline in transport costs produced by the railways, rapid urbanization, and rising incomes led to per capita wine consumption in France reaching more than 160 liters in the 1900s, and there were significant increases in other countries, such as Italy, Portugal, and Spain. The growth in consumption was all the more impressive given that the vine diseasephylloxera vastatrixdestroyed large areas of Europe’s vineyards. The destruction initially was greatest...

    • Chapter 3 Surviving Success in the Midi: Growers, Merchants, and the State
      (pp. 58-76)

      A series of large demonstrations took place in the Midi during the summer of 1907 protesting against low prices and the sale of artificial wines. At the same time, many of Bordeaux’s leading quality wine producers were forced to look to their merchants for financial help, while growers of cheaper wines lobbied local and national governments to establish a regional Bordeaux appellation or brand. A few years later, in 1911, troops were needed to stop the destruction of large quantities of wines that had been brought from outside the Champagne region to Reims and Épernay for making into “champagne.” Phylloxera...

  11. Part II: The Causes of Export Failure

    • [PART II Introduction]
      (pp. 77-80)

      The possibilities for farmers to sell in international markets increased enormously everywhere over the nineteenth century, as world trade grew annually by 4 percent, twice that of GDP among the world’s leading sixteen nations. Rapidly falling freight rates produced by improved shipping and more efficient port infrastructure cut the cost of trade between countries. Tariffs on many products were reduced, at least until the 1870s. Inland transport was transformed by the railways and improved roads that linked producer regions to markets, and information costs declined with the development of the telegraph and rapid growth in the number and circulation of...

    • Chapter 4 Selling to Reluctant Drinkers: The British Market and the International Wine Trade
      (pp. 81-106)

      The difficulties in creating a mass market for wine in nonproducer countries can be examined by considering in detail the nature and organization of the British market. Britain’s growing, comparatively wealthy urban population offered significant potential for wine producers everywhere: if it had consumed just one-tenth of the French figure in the 1890s, this would have created a demand for wine equivalent to 18 percent of Spain’s total output, 14 percent of Italy’s, or 105 percent of Portugal’s.¹ Yet although imports almost tripled between the late 1850s and the mid-1870s, there was no permanent change in drinking habits, and wine...

  12. Part III: Institutional Innovation:: Regional Appellations

    • [PART III Introduction]
      (pp. 107-110)

      Chapter 4 argued that buyer-driven commodity chains in Britain failed to establish strong brand names as they had been able to do with many other foods and beverages. This was caused by the major volatility in wine quality, which was accentuated by vine disease; concerns of widespread fraud and adulteration; and the difficulties in establishing cheap impersonal exchange mechanisms to allow high sales volume, rather than relying on the personal reputation of wine merchants and the associated low volume and high margins. This section examines the response of traditional producer-driven commodity chains to the growth in market opportunities after 1860,...

    • Chapter 5 Bordeaux
      (pp. 111-131)

      The English occupation of Bordeaux between 1152 and 1453 led to a major growth in the wine trade, and imports peaked at 102,724 tons, or about 900,000 hectoliters, in 1308–9.¹ Trade declined once more after the loss of the city and fluctuated over the centuries according to the political situation between the two countries. From the late seventeenth century, duties on French wines were set at higher levels than on those from Portugal and Spain and resulted in British consumers, in the words of David Hume in 1752, being obliged to “buy much worse liquor at a higher price.”²...

    • Chapter 6 Champagne
      (pp. 132-153)

      Champagne producers were the most successful of all producers in establishing brand names, informing consumers of wine quality, and associating the drink with the needs of the rapidly changing lifestyles of the middle and upper classes in rich urban societies during the nineteenth century. Output increased from just 300,000 bottles, equivalent to the production of about 150 hectares of vines on the eve of the French Revolution,¹ to almost 40 million bottles by 1910. The major champagnemaisons, or houses, successfully exploited three interconnected features to achieve this growth. First, they developed new wine-producing methods that allowed quality champagne to...

    • Chapter 7 Port
      (pp. 154-170)

      Wine accounted for about half of all Portugal’s exports during the nineteenth century, with port assuming by far the greatest share. The best and most expensive was made by British merchants to meet consumer demand in their home market, where it enjoyed a privileged position for at least a century and a half after the signing of the Methuen Treaty in 1703. Port is a fortified wine, produced from grapes grown along the steep valley of the River Douro and blended and matured in the cellars (lodges) of the shippers in Vila Nova da Gaia, opposite Porto in northern Portugal....

    • Chapter 8 From Sherry to Spanish White
      (pp. 171-190)

      Sherry is a name given to a wide variety of wine types produced in the geographical region around the Bay of Cadiz, including Jerez de la Frontera, Sanlúar de Barrameda, and El Puerto de Santa María, although for brevity the region is referred to here as Jerez.¹ Exports to the British market grew rapidly from the late 1820s to a peak in 1873 at about 30 million liters and accounted for 37 percent of the wine drunk in that market. Sales then declined even more rapidly and were no greater in the early 1890s than they had been seventy years...

  13. Part IV: The Great Divergence:: The Growth of Industrial Wine Production in the New World

    • [PART IV Introduction]
      (pp. 191-194)

      Wine production was of little importance in the New World until the late nineteenth century. This was despite the considerable interest shown by colonial governments as wine was considered a valuable addition to local diet; was a necessity for the Catholic Church for celebrating Mass; and offered a potential source of taxation. In addition, viticulture, in contrast to ranching, required permanent, densely settled communities of small farmers. Wine exports also promised to reduce the dependence of Britain and the Netherlands on French and Iberian imports. Hernán Cortés introduced vines into Nueva España (presentday Mexico) in the 1520s, and they were...

    • Chapter 9 Big Business and American Wine: The California Wine Association
      (pp. 195-219)

      Wine has two very different histories in the United States. On the East Coast the attempts to plant European vines (Vitis vinifera) failed repeatedly because of the excessively harsh winters for the cold-sensitive European vine or endemic cryptogammic diseases such as downy and powdery mildew, anthracnose, and black rot, which thrived in areas of high humidity, as well as phylloxera.¹ From the late eighteenth century a number of new vines appeared east of the Rocky Mountains that were either domestications of native American species (V. labrusca and V. rotundifolia) or naturally occurring hybrids between American and European varieties, such as...

    • Chapter 10 Australia: The Tyranny of Distance and Domestic Beer Drinkers
      (pp. 220-239)

      The Australian wine industry dates from the end of the eighteenth century, but as in California and Argentina, it was only in the two or three decades prior to the First World War that it became commercially important. The early settlers and government authorities were attracted to viticulture because it was a labor-intensive crop, allowing larger settlements than found with extensive livestock or cereal farming. From a social perspective, it was believed that winedrinking Europeans became less drunk than spirit-drinking Australians, while the government saw wine as a potential export commodity and source of taxation. However, Australia suffered from a...

    • Chapter 11 Argentina: New World Producers and Old World Consumers
      (pp. 240-262)

      Argentina between 1869 and 1914 embarked on a period of exceptional growth, with per capita income increasing by an average of 5 percent a year and population jumping from 1.74 million to 7.89 million. By 1914 Argentina had a higher per capita income and real wages than in most European countries (table 11.1).¹ Economic growth was caused by exogenous factors as falling transport costs and external demand gave farmers a comparative advantage in the production of raw materials (hides and wool) and later foodstuffs (wheat and frozen meat). High wages attracted European migrants and were accompanied by large flows of...

  14. Conclusion
    (pp. 263-272)

    This book has followed the growth and development of wine production from mostly small-scale family operators in southern Europe to a worldwide concern, with large-scale industrial producers using scientific wine-making methods and modern marketing techniques to sell their wine. Change was not uniform, and by 1914 major differences were found in the organization of production and marketing of commodity wines in places as far-flung as France, California, South Australia, and Mendoza. Even within a country such as France, new and differing institutions had appeared that altered market incentives for growers, winemakers, and merchants in places such as Bordeaux, Reims, and...

  15. Appendix 1 Vineyards and Wineries
    (pp. 273-278)
  16. Appendix 2 Wine Prices
    (pp. 279-290)
  17. Glossary
    (pp. 291-292)
  18. Bibliography
    (pp. 293-312)
  19. Index
    (pp. 313-318)