Historia Economica De Vitivinicultura

FACTOR ENDOWMENTS, MARKETS AND VERTICAL INTEGRATION. THE DEVELOPMENT OF COMMERCIAL WINE PRODUCTION IN ARGENTINA, AUSTRALIA AND CALIFORNIA, C1870-1914*
JAMES SIMPSON
Universidad Carlos III de Madrida

ABSTRACT

Grape quality and the nature of market demand played a major role in determining the organizational structure of the wine industry in the three decades prior to 1914. In contrast toEurope where grape growing and winemaking were specialist activities, in the New World winemaking and selling were often integrated. This encouraged the appearance of large industrial wineries producing wines that could be branded. Differences within the New World itself can be attributable to the nature of demand and, in particular, to whether wine was considered an article of primary consumption(Argentina), or whether it competed with other, more popular alcoholic beverages such as beer and spirits (Australia and California). Keywords: wine factor endowments, firm organization, vertical integration, new settlers, XIX century, grape production, commercial wine production, commodity chains JEL Code: M21, N51, N56, N57
* Received 9 March 2010. Accepted 26 October 2010. I am particularlygrateful to Kym Anderson, ´ Patricia Barrio de Villanueva, Luis Bertola, Luis Coria, Pablo Lacoste, Jim Lapsley, Ana Mateu, Ian McLean, Lizzi Pasteris and Steve Stein for comments and suggestions. Antonio Tena was especially helpful during the preparation of the final version. Two anonymous referees made useful suggestions. The author acknowledges financial support from Spain’s Education Ministry(ECO2009-10739 and 2006-08188/ECON). a ´ Departamento de Historia Economica e Instituciones and Instituto Figuerola de Historia y Ciencias Sociales, Universidad Carlos III de Madrid. james.simpson@uc3m.es

´ Revista de Historia Economica, Journal of lberian and Latin American Economic History Vol. 29, No. 1: 39-66. doi:10.1017/S0212610910000236 & Instituto Figuerola, Universidad Carlos III de Madrid,2011

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JAMES SIMPSON

RESUMEN

´cadas anteriores a la I Guerra Mundial, la calidad de la uva y En las tres de la naturaleza de la demanda del mercado jugaron un papel determinante en la estructura organizativa de la industria del vino. En contraste con Europa, ´ donde el cultivo de la uva y la produccion del vino fueron actividades ´ especializadas, en el Nuevo Mundo la produccion yventa del vino estuvieron ´ ´ integradas verticalmente. Esto favorecio la aparicion de grandes industrias ´ ´ vinıcolas, que producıan vinos de marca. Las diferencias dentro del Nuevo Mundo pueden ser atribuidas a la naturaleza de la demanda, en especial ´ cuando el vino fue considerado un artıculo de consumo primario (Argentina), ´ ´ ´s o cuando competıa con otras bebidas alcoholicas ma popularestales como la cerveza y los alcoholes graduados (Australia y California). ´ ´ ´ Palabras clave: dotacion de factores vinıcolas, organizacion de empresas, ´ ´ ´ integracion vertical, Nuevo Mundo siglo XIX, produccion de uvas, produccion ´ de vino comercial, cambio de mercancıas

1.

INTRODUCTION

Despite the interest of the early European settlers, commercial wine production in the New Worldonly developed in the late 19th century in response to growing urban demand, improved transportation and new winemaking technologies. By 1914, the industry was well established in a number of countries, and contemporaries noted that it had developed very differently from the situation in the Old World. In particular, the new largescale wineries were dependent in a way that was not the case inEurope on specialist grape producers. Wine producers were much more involved in marketing, and wines were often sold under brand names. Important differences also existed among New World producers themselves, especially with respect to the marketing and distribution of wine. In California, a handful of large San Francisco merchants cornered the market and created a hierarchical organization,...