Revival of Iberian Viticulture
It was only towards the end of the 19th century that the situation in viticulture began to improve, albeit having suffered an enormous drop in yield. Phylloxera changed the wine industry world view. Malodorous wines from hybrid grape varieties and the production of synthetic wine posed a serious challenge to large wine producers battered by the market slump. Many succumbed to the temptation simply to avoid having to close shop. Still others were lucky that their vineyards remained untouched by the American plagues. Once rootstock resistance and their suitability as rootstock for Iberian varieties had been figured out, the use of American varieties was banned and legislation defining what constituted wine was introduced.
In Spain. French wine merchants imported wine made from European grapes from wherever they could, owing to the wine shortage in France in the 1870s and 1880s. Consequently regions such as Rioja invested heavily in new vineyards.Despite this, however in the 1885/1886 season, wine prices fell from 25 to 13 Pesetas because the trade chose to dilute the wines, rather than pay the high market prices. The toxicity of some additives was overlooked, and cheap German industrial alcohol was added to the wine. This was how wine purchased, for example, in Palencia at 12 Real could be resold (at a definite profit) at 11 Real. The State reacted by imposing import duties on alcohol. Ultimately, this approach was not conducive to preserving the reputation of Spanish wine. (Cañin, 1998: 429). Rioja in particular suffered the effects of over‑production between 1891 and 1904, then had to face the next crisis; Phylloxera on its own doorstep.
Because countless small and medium‑sized wine producers were experiencing the dual difficulties of the American plagues and a slump in the trade, the idea of creating wine producers’ cooperatives took hold in Spain as well. The first were formed in Barberà in 1903, and in Verdell in 1905 (both in Catalonia); Navarra followed. After the Second World War, cooperatives accounted for some 28 million hectolitres.
Castile and Leon was also badly affected.By the mid‑ 20th century it still had not been able to recover because after the American plagues in the Thirties, it also suffered a severe drought and shortage of labour. It was only after the civil war, with the establishment of new cooperatives and industrial wineries that Castile and Leon began to flourish and these well‑known wine growing regions expanded to their former size once again. (Huetz, 2000: 16).
Another strategy employed in the wake of the American plagues was the formation of research institutions. By 1880, five such wine and viticulture institutions had been established (in Zaragoza, Tarragona, Valencia, Sagunto, and Malaga). In 1888, even the liberal politicians were enthusiastic about founding more State‑run research centres in Alicante, such as the Unidad Real de Logroño y Zamora; the national oenological institute was later affiliated to the Escola General de Agricultura of Madrid. Several other institutes were formed to try to eradicate the problem. It seems to be a curious trend in Iberia for the State to solve temporary problems by institutionalising them. Cañin (1998: 444) quotes Huetz de Lemps succinctly, since he is one of the foremost authorities on Spanish wine history: Whilst France, the worst‑affected by Phylloxera, immediately stopped the epidemic by grafting (using the hybrid vine option), Iberia held off for many years on concrete countermeasures.The Spanish Civil War (1936‑39) in the critical years of rehabilitation was certainly a problem, but thereafter clear solutions were found. Aligning viticulture with the market had begun earlier in Spain. In 1947, Spain became a monarchy, although Prince Juan Carlos was only appointed by Franco as his successor in 1969, and Spain opened up its borders as a result of its agreement with the United States, by joining the United Nations, and by establishing a wide variety of tourist venues. All this occurred whilst Portugal remained relatively isolated under Salazar.
In Spain, the State’s influence in the area of the economy was less pronounced. With EU membership, the Ministry for Agriculture delegated economic powers to “autonomous bodies”. Right from the outset, significant wineries in Catalonia, Rioja, Ribeira del Duero and Jerez participated in this restructuring, and in some cases, are now subsidiaries of international concerns. The private sector was now able to get involved in strategic decision making within inter‑professional organizations. In the La Mancha, Extremadura, and other regions powerful cooperatives were representing the interests of their members.
Poor harvests in Portugal at the turn of the century of 5‑6 million hectolitres was followed by bumper crops of 10, 12 and even 14 million hl. (Boletim do Banco Nacional Ultramarino, 1966: 33) in the early 1900s.
It was obvious that the former high quality grapevine varieties and many quality regional varieties had first to undergo rehabilitation by being replaced with the Phylloxera‑resistant Vinifera hybrids. Despite the best efforts of the public sector, viticulture had to endure extreme difficulties until initial signs of recovery at the turn of the century signalled a new beginning.
Portugal was, of course, in no way inferior to Spain in terms of the State establishing experimental vineyards of almost all grapevine varieties known to the Western world, and creating public offices and institutions.
Political experiments aside, however, even during this critical phase of wine production, influential scientific researchers provided a strong central driving force, and pragmatic criteria did determine policy.
Because of the crisis, the “Estado Novo” (the Second Republic) promoted the formation of cooperatives in the 1920s, and in 1933, the Federação dos Vinicultores do Centro e Sul de Portugal [Viticultural Association of Central and Southern Portugal] was founded to regulate the market. In 1937, this association became the Junta Nacional do Vinho (JNV), and was transformed in 1986 into the IVV (Instituto da Vinha e do Vinho) in order to steer European integration.
One factor which led to the recovery of the Portuguese wine industry was its ever‑growing exports to the colonies, which in 1965 amounted to 1.3 million hectolitres (Boletim do Banco Nacional Ultramarino, 1966: 56). The dynamic structure of the cooperatives, initially comprising 56 members, but which grew by a further 34 in the 1960s, meant that slightly over 50% of wine produced was exported (ibid). Unfortunately, this led to protectionist State intervention in the form of end product subsidies, in favour of training programmes or marketing assistance, which impacted negatively on quality. Indeed, outputreached a high point in 1962 with 15 million hectolitres (Boletim do Banco Nacional Ultramarino, 1966: 35), although in large part the focus was on maximising yield, the effects of which are still felt today. With the “garantia de bom fim”, the producer was guaranteed distillation of his product by the State and did not need to pay particular attention to market demand. Entire regions opted for highly productive varieties, such as the white Seminario, Boal Alicante, Diagalves, as well as the new agricultural research institute varieties (intraspecific hybrids selected based on yield, like the Seara Nova), and the traditional red varieties Moreto, Marufo, Rufete, Tinta Carvalha, as well as varieties developed by research institutes. Thus, entire wine‑growing regions moved to mass production. As it did before the hybrid varieties, this brought with it a heavy legacy.
Given that neither Spain nor Portugal actively participated in the Second World War it is astonishing that neither was able to take advantage of post war opportunities to broaden their international market base. Admittedly, the first “global players” in viticulture, (Heublein in Connecticut, and Dreyfus in New York) did invest capital in, or agreed fixed contracts with, Portuguese wineries; small to medium sized wineries and cooperatives, however, remained excluded from the export market. The main reason was, of course, the import restrictions imposed by countries of the European Economic Community, which continued to isolate themselves in the 60s, in order to face the challenges of rebuilding the infrastructures of their member states, and ensure job security within their agricultural sectors. This is why goods exchanged within the EC stood in the foreground of its trade liberalisation.
Iberia, however had a new nightmare to contend with: overproduction. Lack of industrialisation, combined with failure to modernise agriculture led to the third “rural exodus” which started in the late 1950s and continued until the end of the 60s. Some six million Spaniards and one hundred thousand Portuguese were forced to emigrate as a result.
Initially at national level, and then much later at the level of the EU, the new spectre of State intervention dogged the wine markets. With its bureaucracy regulating control, research, and administration in the wine industry, as well as those ministries which had been created to deal with the American plagues crisis, Staterun institutions became the conscience of the wine industry. With the support of politicians eager for votes, these institutions began to pander to social distress in that they focused on “surplus reduction” regulations and subsidies, which kept getting bigger and bigger, all the while ignoring the dictates of the market. With the various forms of distillation in conjunction with regulations imposed on cultivation, supply, and yield reduction, etc., they sought to achieve equilibrium in the market through administrative measures, as long as their costs represented the item with the biggest margin in the European Community budget, and therefore far exceeded the cost of social benefits disbursed. The issues of wine quality and choice of vine variety were sacrificed to this end. As far as distillation was concerned, all that counted was either the quantity and the alcohol content, hence mass production, or noble grape varieties that were selected for cultivation by clone breeders based chiefly on yield, and not their intrinsic oenological properties. (Malvasia Rei/Palomino, new hybrids such as Seara Nova, Alicante Branco, the high‑yield French variety, Carignan, or the Grenache clones are some examples). Portugal used to have its own “seminário”, or “breeding farm” region devoted to Malvasia Rei, which used to produce almost exclusively for distillation.It even went as far as recommending the mandatory addition of ethanol‑based biofuels to petrol and diesel.
During the 1990s Spain was Europe’s largest wine producing country with 1,224 hectares under cultivation in 1996. This represents almost a quarter of the EU agricultural area. Its vineyards, however, are situated for the most part on poor soils, with little irrigation. Fertile soils are reserved for other important agricultural crops such as cereals, olives and citrus. More than 55% of vineyards are located in the 80 DO (Denominación de Origen, or Designation of Origin) quality wine regions. The dominant regional grapevine varieties are Airén (La Mancha) with 36% , followed by Garnacha with 14%, and Monastrell and Bobal with 8% of DO land under cultivation. Surprisingly, the well‑known quality varieties of Palomino and Tempranillo occupy only 4% of this land. Like many grapevine varieties given a priority ranking in this book, there is a huge difference between the size of the area under cultivation and the quality of the wine itself. What is striking is the importance of table grapes, which cover almost 40,000 hectares, in Spain, whilst Portugal imports them from its neighbour.
Sherry (Jerez) had acquired an international position similar to that of Port wine using the Palomino, Pedro Ximénez, and Zalema varieties, likewise the wines from Rioja (Aragonez, Garnacha and Cariñena), from Cava (Xarello, Macabeu, Parellada), from the Ribeira del Duero (Tempranillo, Graciano, Garnacha), followed later by the white varieties from Rueda Verdejo, and the Alvarinho from Rias Baixas. Castilla La Mancha was able to achieve a key export position by exporting the Airén variety in barrels and in bottled form as an economically‑priced base wine. All of these wines have managed to capture significant market share because of their excellent price performance ratio.
In her article, Núria Puig (El mercado vinícola Español en el siglo xx, Reguladores y regulados entre 1932 y 1970, in I encontro de Historiadores 2000: 243) devotes some time to the Spanish situation:
The problem was overproduction, to which Mediterranean countries reacted by setting up distillation schemes. The Office international du vin (OIV) created in Paris in 1924, by contrast, saw its task as being to promote quality, rather than quantity. At the same time, thanks to the “golden age” of the “garantie de bonne fin” (guaranteed purchase of wine growers’ production), the area planted to vineyards grew exponentially. The problem diminished somewhat during the Second World War and the Spanish Civil War, only to escalate thereafter. The decline in domestic wine consumption in Spain and Portugal in general, and the decline in the consumption of spirits in particular accentuated the imbalance. The problem of an initial reduction in imports by EEC countries, compounded in Portugal by the collapse of the huge consumer market in its colonies, and the rise in rosé exports from the USA forced both governments to consider countermeasures to correct the imbalance in the market caused by them in the first place. The non wine‑ producing countries of the EEC – especially England, The Netherlands, and Sweden – were opposed to the EC Budget bearing this financial burden in the long term. Measures to move vineyards to poor regions with less fertile soils, crop reduction and vineyard registration, and many more measures designed to remove product from the market were amongst the more desperate actions. In Spain disputes arose between the wine industry and the Government. (Puig, 2000: 245). The Government began to tackle the problem seriously. The first steps included demarcated designation of origin, orientation of the viticultural institutions towards quality improvement, incentives to segment the market by product differentiation, and physical monitoring of vineyard hectarage restrictions. It was followed by laws to stimulate consumption, and finally, exports were promoted to alleviate hardship within the wine sector. With it, the North African wine supply to France came to an end, and the opening up of the EC to exports from non‑ EC countries from 1969 pushed Spain. initially because of price, towards the exports market. Thanks to in‑house research, leaders in the wine sector, such as the large Cava, Rioja and Sherry wine manufacturers, had shown the way in terms of selecting the right grapevine varieties, and therefore producing good quality wine.
From the end of the 70s, Spain became the wine export miracle. The first ray of hope was the gulf of Mexico. Then came Germany, with its enormous demand for base wine for sparkling wine and teinturier to blend with its own light red wines, together with the gradually emerging bodega mentality in the 70s which spurred on the success of the Spanish tourism industry. These were the humble beginnings of what would soon take on global proportions. Portugal lagged behind somewhat, given the turmoil of democratisation and a slump in trade with its own export miracle, sparkling Rosé.
EC association in the early 80s effectively did away with trade barriers and with the Uruguay Round of GATT (1986‑1994) and the Marrakesh Agreement, the last trade barriers against non member countries soon disappeared. With the accession to the EU in the mid‑80s, governmental and private sector thinking ought to have changed gradually. But with the old structures, and the administration’s insistence, and that of private individuals, on holding on to the old ways of thinking, it was no wonder that change did not happen overnight.
In addition, this less market‑orientated profession was repeatedly side‑tracked by free market rules, and ultimately, the EC made the same mistake by implementing the hapless “garantie de bonne fin” system of the former nation states. Unfavourable developments stemming from anti‑competition regulations meant that the markets did not get back on an even keel. A market split between rich and poor occurred, the serious consequences of which are to some extent still felt today, particularly by cooperatives. While in the recognised European quality wine regions – Burgundy, Bordeaux, Champagne, Barolo, Barbeira, Rioja, Sherry, and Cava, to name a few – prices followed an upward trend, often with astronomical margins, the prices offered for table wines was still only slightly above the distillation intervention price in qualitative terms.
In contrast to Spain, Portugal was in a difficult market position in the 70s and 80s. The 360,000 hectares under cultivation in the 1960s had been reduced to 230,000 hectares by the turn of the century. The range of grapevine varieties changed thanks to a shift in market conditions and vinification technology. Because of a flexible supply contract system for Port wine, supply was always tailored to demand, and its quality strictly controlled. Port wine successfully sustained its position at the upper end of the market, since quality was maintained by using the Touriga Nacional, Touriga Franca (formerly Francesa), Tinta Roriz (Tempranillo), Tinta Barroca and Tinto Cão varieties, both at home and abroad.The lovely sparkling rosé table wine (Alvarelhão, Camarate, Marufo, Rufete, Malvasia Preto, Moreto grapevine varieties) which enjoyed success in the 1960s, lost its dominant position in the marketplace when the American shareholder and distributor withdrew.
What was striking at the time was the decline in classic trademark red table wines without regional designation in favour of wines of designated origin. Surprisingly, they were superseded by wines from the newly designated region of Alentejo, with the grapes Trincadeira, Castelão, Aragonez (Tempranillo), Alicante‑Bouschet, and Alfro‑ cheiro becoming consumer favourites.
The variety‑orientated quality wineries of all regions which had sufficiently autochthonous grapevine varieties, especially the table wines of the Douro, were able to distinguish themselves with the Port wine varieties.
With respect to white wines, vinho verde acquired a noteworthy position under the label of a leading manufacturer; the issue of grapevine varieties first became a subject of serious discussion with the dominance of the Loureiro and Alvarinho varieties, as did the national and international advancement of market‑orientated goods. The market experienced a clear division between a few large export‑orientated companies, sometimes even with non Portuguese capital investment, and wine manufacturers for the most part unfamiliar with the export market. For a long time after Salazar and the so‑called industrial revolution, the official government research and innovation policy was one more excuse for the wine sector to busy itself with curricular and international viticultural issues only. Later, State‑run regional and university research units were in competition with central State institutions without any meaningful allocation of powers or programme of specifications being dictated from above. Above all, it meant that no concerted market‑ orientated innovation policy could be implemented; this, at a time when wine export was receiving strong backing from the State in most other European wine‑producing countries, and therefore flourishing.