«The introduction of «appellations d'origine» in Europe and Spain: wine types and wine quality. Juan Pan-Montojo (Universidad Autónoma de Madrid) ...»
6. The Spanish precedents and the regulation in the 1930s In 1892 for the first time a legal norm defined in Spain what wine was: “the liquid resulting of the fermentation of grapes, without addition of substances alien to their components”. The same decree forbade the marketing under the name of wine any drink that did not correspond to this definition. This legal text was a direct translation of the terms of a ruling of the Junta consultiva agronómica (the council that presided over the State agricultural engineers) which justified this strict definition since, after the end of the commercial treaty with France that had enabled the country to export huge amounts of common wine, the time had come to export not only to France but to the universal market: prestige abroad was hence the decisive reason for the new norm32. Among the substances alien to grapes that were forbidden in wine, one was very important: “industrial alcohol”. It had been the basis of wine adulteration in the golden years of wine exports and continued to be used to concoct wine for sale abroad: that is why it was suggested that to make the prohibition more efficient it should be combined with a high differential tax on the alcohol that was not made out of wine. In the following forty years, the alcohol taxation was to become a very hot and dynamic question for this reason: apart from producing revenue, it was supposed to lead to the expulsion of industrial alcohol from the wine market.
Similar forces to those behind the legal definition of wine, that is to say creating new instruments for the international competition of Spanish wines, were behind the official Spanish attitude before the international agreements on false or equivocal geographical indications. Geographical indications were relevant elements in the international wine market since, given the large number. Rouanet de Vigne Lavit (1935) supplies a comparative analysis of corporatist policies in the European wine legislation of the 1930s. On the Portuguese Estado Novo, see Freire (2010).
. Expediente del Consejo superior de Agricultura, Industria y Comercio sobre el dictamen de la Junta consultiva agronómica, 9-II-1892 (AMA, leg. 70 A).
. Fernández (2008).
Old and New Worlds: the Global Challenges of Rural History | International Conference, Lisbon, ISCTE-IUL, 27-30 January 2016 of producers and merchants, wine types and qualities tended to be identified by them. It was so recognised by the international Arrangement of the 14th of April, 189134. In this convention, subscribed by a restricted number of countries35, among those that signed the convention of the Paris Union for the Protection of Industrial Property, each state kept the power to decide which among geographic appellations used in trade were geographical indications and which were generic names derived from concrete places, in order to protect legally the former. Its article 4, proposed by Portugal and supported by Spain, excluded wine from this general rule and stated that regional appellations could never be considered generic in the case of wine products.
The arrangement of Madrid was not supplemented by a more detailed Spanish legislation. The Law of industrial property of 1902 allowed municipalities and provinces to start the procedure, and eventually acquire, the exclusive right of use of collective labels, but did not specify how local authorities could or should use that right if their claims were accepted. In this uncertain legal framework evolved the creation of geographic appellations until 1929, when the foundations for the 1932 statute of wine were laid. Uncertainty was in fact a trait sought for by legislators: thus they could solve case by case what proved to be a highly troublesome question wherever it was raised36. Already in the 1890s, there was a project of the Chamber of Commerce of Málaga to launch a guarantee label for the local wines, whereas in Jerez the question had been raised in the 1860s and 70s. In this latter city, it was in the 1880s when the agricultural engineer Fernández de la Rosa tried to find a middle way between the demands of growers, on the one hand, and industrialists and exporters, on the other: creating a label for wines produced in Jerez out of grape production in the area (Xerez natural) and another one for those produced by houses of the region (Xerez combinado)37. In Malaga after the phylloxera, the local interest in an appellation declined, given the new specialisation of the region in blended wines. In Jerez, there was a long and dual conflict that was provisionally solved in favour of exporters, who after the phylloxera became in fact major landowners, and in favour of Jerez –against other cities and villages which had produced sherry in the past- by the government in 192638.
In the rest of Spain, there were no other appellations by 1890 which were known abroad. In the domestic market, on the contrary, there were at least two prestigious ones: Rioja and Valdepeñas.
In Rioja a first project of collective label was launched in 1908, although it was abandoned for internal disputes among promoters concerning the geographic space to be included39. In the 1920s, in the middle of the campaign against the re-legalisation of industrial alcohols to fortify wines, the wine-growers organisations demanded a collective label for Rioja. The government accepted the proposal and created a procedure for the management of the appellation: in 1926 the first regulation of Rioja saw the light. Two years later, in 1928, the region had been demarcated and a first regulatory council, with its seat in the oenological station of Haro, was formed. In Valdepeñas, circumstances and chronology were similar but the petition of wineThe content of the Arrangement or Convention of Madrid and other international agreements pertaining geographic indications and labels is explained in Fernández Novoa (1970) and Coello (2010).
. Spain, France, Guatemala, Portugal, United Kingdom, Tunicia and Switzerland were the countries that signed the arrangement in 1891.
The reply of the minister of Agriculture, Ugarte, to the criticisms to the vagueness of the law and to the demand of a more transparent legislation by the deputy of Cádiz Romero reflected the conscious ambiguity of the norms in this field (DS, CD, 1914 legislature, nº 70, 8 de July, 1914).
. Escrito de la Cámara de Comercio, Industria y Navegación de Málaga el 29 de mayo de 1892 (AMA, leg.
69). On Jerez, see Cabral (1987). Fernández de la Rosa’s proposal can be found in Tema 4º. Garantía interior y exterior de las marcas de vinos en Congreso (1887).
. Cabral (1987).
. Actas (1908), páginas 44-45.
Old and New Worlds: the Global Challenges of Rural History | International Conference, Lisbon, ISCTE-IUL, 27-30 January 2016 growers in 1924 was stopped by local industrialists: the conflict was revived in the 1930s by the new possibilities offered by the Statute of Wine40.
All throughout these first processes of development of appellations, the Spanish government kept a highly contradictory position. It wanted to protect sherry against South African and British sherries (a step that implied the collaboration of Britain and its colonies and dominions) but it acknowledged the strength and tried to help Spanish industrial groups which produced "champagne", "port" and "médoc". It was favourable to appellation of origin, in so far they were accepted by all interests concerned, and even to their use to promote wine-types and improve their marketability, but did not accept French proposals in the 1920s which implied a possible threat to Spanish competition via prices. In 1931 there was, however, a turning point: the Franco-Spanish commercial treaty of 1931 foresaw the domestic regulation of appellations of origin in Spain as a previous step to a new relationship between both countries41. This regulation had its foundation in the Estatuto del Vino, in 1932-33, and in the Decree of 10.07.1936 on appellations of origin. In these norms, Spain adopted the French model: appellations of origin would entail not only a demarcation of the area of production of grapes and the area of winemaking, which did not have to coincide, but as well to special traits in its production process, considered to be typical and differential of the geographic area of origin42. Some temporary exceptions were established but in 1936, the naturalist model had been fully adopted. It protected existing wine “identities” and at the same time it foresaw its multiplication to consolidate new ones: in 1932, 1933 and 1935, well known national appellations and locally recognised ones shared a position in the legal text, which hence was planning a future complete map of appellations. There was a lot of wishful thinking in all this legislation that seemed to abandon the competition via price to promote some future premium wines.
7. Epilogue: appellations of origin, organisation of the wine market and quality Appellations of origin were created in order to protect the producers of wines that enjoyed an international fame, linked to the specific features of its agro-ecological environment and/or to the peculiarities of its productive process and/or a long tradition of export or supply of important urban centres, especially those which produced consumption patterns. Whatever the main factor, a number of European regions benefitted at the end of the 19th century from a differential prestige that enabled them to bid for higher prices. But that prestige did not ensure stability of sales. To start with because the prestige of a name generated incentives to the sale of inferior wines or even imitations: a cycle of prestige-fraud-decline, already experienced by different productive areas throughout their history, that acquired a new intensity in the second half of the 19th century. Price differentials between common and superior wines increased and possibilities of falsification multiplied. The consolidation of labels, such as those of the "vins classés" in Bordeaux, of the big houses of Champagne or those of some British importers of Sherry or Port offered a partial barrier to the working of the cycle. However none of those labels could catch an important segment of the market, and therefore supply was fragmented: regional appellations and not labels were the ones that enjoyed the public favour or rejection. In other words, appellations were and are public goods that simplified consumers' choices and reduced search and information costs in an extremely heterogeneous market. In the absence of rules to use appellations, their very existence tends to promote free-riders who in the mid-run devaluate them.
. AHN, Fondos Contemporáneos, Directorio Militar, leg. 212-2, expediente 16.
. That is what the preamble of the decree of 17.4.1932 openly said, although it can be assumed that the fall of the Monarchy in 1931 and the proclamation of the Democratic Republic had actually given a new voice to interest groups and associations, like those of small viticulturists, which were in general terms favourable to appellations.
. Coello (2008), pp. 1177-1184.
Old and New Worlds: the Global Challenges of Rural History | International Conference, Lisbon, ISCTE-IUL, 27-30 January 2016 The regulation initially developed on appellations, in France, Portugal and Hungary just fixed the boundaries of the wines with a higher national and international prestige, export wines. This first legislation was supported by merchants and shippers, who wanted some kind of public backing against competition from other regions and countries, and by politicians extremely worried by the drop in value of one of the most important items in the balance of trade of these three countries. But this initial formula did not work. Appellations did not handicap any of those who could devaluate the public good "wine prestige": internal free-riders (in principle any of the producers within the region officially authorised to use an appellation) and foreign producers of imitations and falsifications. Against this second group were directed international treaties and the O.I.V. in the 1920s under the leadership of France. Against both dangers, different groups of producers and a growing number of bureaucrats developed and propagated a new interpretation of appellations: the naturalist or French model which presented appellations not as the right to use a true indication of where products were made, but as the right of those who made wine in a certain place and according to certain ideal rules to be fixed in a public way.
Those ideal rules were defended as the traditional ones, as those that had opened the way to the fame of the appellation and should bring it back and preserve it. The legal translation of this interpretation could give a legitimate backing to the monopoly of names and strengthen the case in favour of appellations in the international market: appellations turned to be equal to controlled and genuine quality, and their rejection implied therefore an open door to fraud and adulteration. Internal free-riders and foreign free-riders were to be chased out of the market in the benefit of consumers and producers by this version of appellations.
Insofar as the simple appellations were not efficient to keep prestige and avoid overproduction, the transition from them to the controlled appellations was nearly unavoidable. However, controls had important enemies, especially among small and powerful groups such as shippers and wine-merchants, who could expect a less flexible and a more expensive supply of their raw materials (grapes or wine) and a more expensive process of production. Furthermore, those who had created a successful label did not see the need of a public control of any sort in order to keep their prestige (although they had supported the prosecution of false indications of origin as
a general shield). The step could only be taken thanks to the convergence of four elements:
- the autonomous logic of public bureaucracies confronted with continuous conflicts in the international arena, in which controlled appellations where much easier to defend, and with the demands of viticulturists who judged insufficient the formal defence of appellations;
- the structural situation of overproduction in the 1920s, that spread to most quality wines after the crisis of 1929;