Old World versus New World: the origins of organizational diversity in the international wine industry, 1850-1914

Wine production in Europe today is dominated by small family vineyards and cooperative wineries, while in the New World viticulture and viniculture is highly concentrated and vertically integrated. This paper argues that these fundamental organizational differences appeared from the turmoil in wine markets at the turn of the twentieth century. As technological change endangered existing rents, growers, wine-makers, and merchants lobbied governments to introduce laws and create new institutions that regulated markets in their favor. The political voice and bargaining power of the economic agents varied greatly both within, and between, countries, leading to the introduction of very different policies.