If, as I suggested in my last post, there are “invisible” wines, then it makes sense that there are also invisible wineries. Here in the U.S. for example we are accustomed to”virtual” wineries that are invisible in the physical sense. They frequently exist as brands in the portfolios of larger wine companies, but have no distinct location or particular terroir.
The wines are often sourced from many regions, wherever the price-quality mix is right, and the blends are determined by supply and demand. Some virtual wineries become durable brands, but most are like ghosts — they appear and disappear as wine buying trends or market opportunities change.
(Just now, for example, I’m noticing a lot of red blends from invisible wineries — an opportunity to dispose of surplus Syrah?)
One-Fourth of the Global Glass
Virtual wineries are an interesting phenomenon but they’re not what I want to discuss here. The invisible wineries that concern me are Europe’s cooperative wine producers.
The Oxford Companion to Wine (2005) gives a sense of the importance of European cooperatives as a production sector. Here are excerpts.
“Since 1975, more than half of the wine produced in France has been produced by co-operatives, and the total area of vineyard owned by their members is also more than half the French total”
“Nearly two in every three German vine-growers today belong to the local co-operative, although their vineyards are often a small, part-time activity which therefore, cumulatively, represent almost a third of the total German area under vine”
“In Italy, the cantina sociale is no less important, accounting for over 60 per cent of the country’s production.”
“As in Italy, co-operatives are extremely important in Iberia, where grapes are so often grown alongside other crops. According to Metcalfe and McWhirter, more than 60 per cent of each vintage was delivered to one of Spain’s 1,000 wine co-operatives or Portugal’s 300 … in the late 1980s and this has not changed substantially. However, the percentage of bottled wine sold by co-ops in Spain remains tiny—between 10 and 15 per cent of their total production, the rest being sold in bulk, with a substantial percentage going directly to distillation”
The numbers will be different today, of course; probably lower because of the effects of the EU reforms, but that’s still a lot of wine. Since France, Italy, Spain Portugal and Germany together account for roughly half of total world wine production and all of these countries have substantial cooperative sectors, I estimate that as much as a quarter of the global glass is filled by wine made by cooperatives, an incredible amount given how little attention these producers usually receive (that’s the invisibility part).
The Invisibility Cloak
One reason cooperatives are often overlooked is the “high quantity, low quality” stereotype that they wear like a Harry Potter invisibility cloak. No one much wants to think or talk about mediocre wine when excellent wine is so much more interesting.
The stereotype that cooperative wines are cheap plonk can be blamed in part on the relatively few cooperatives that have established “visible” brands that define the category. There are cooperatives that achieve real excellence (watch for my next post), but most people are likely to think of Tavernello or Riunite when they think of cooperatives, not Cantina Sociale dei Produttori del Barbaresco, for example.
Italy’s best selling brand, the ubiquitous Tavernello, is a product of the Caviro cooperative. In the United States the most famous branded cooperative wine is probably the product of Cantina Sociale Riunite. That’s right, the sweetish fizzy Lambrusco that was for many years the best selling Italian wine in the country: Reunite on ice. So nice!
So the stereotype is understandable, but it is also unfair (as stereotypes tend to be). In fact, taking the long view, it is important to appreciate that cooperatives as a group actually improved wine and wine-making throughout Europe.
The cooperative wineries that appeared in the first three decades of the 20th century represented a vast improvement over the cellars they replaced. Collective investment (plus government subsidies and easy farm credit terms) allowed the purchase of newer and better equipment and facilities overseen by trained professional wine-making staff. Individual winegrowers farming a hectare of two of grapes could never have produced commercial quantities of wine at the standard of the new cooperatives. No doubt about it, in their heyday cooperatives were a step up in wine quality.
They Never Would be Missed
But the cooperative form of business organization also created incentive problems. In many cases the cooperatives were compelled (by agreement or custom) to purchase whatever grapes that their members presented. When they could, members would often retain the best grapes for their own private production and turn the rest over to the cooperative. When many members did this, the quality of the collective wine necessarily fell along with its probably market price. This increased the incentive to keep the best grapes in house and to deliver masses of low quality grapes to the cooperative.
It was a race to the bottom that ended for many wineries with wine so foul its only buyer was the “buyer of last resort” — the government-subsidized “crisis” distillery. This made the cooperatives even more invisible, as Tim Atkins has noted. “If co-operatives were to disappear tomorrow — and there are plenty of people who wish they would — so would Europe’s wine surplus.” Like the people on Ko-Ko’s little list in the Mikado, they’d none of them be missed. You can’t get more invisible than that!
The stereotype of cooperative wines is very depressing but, as Atkins also notes, it is a mistake to define any group by its least attractive member. Some of the best wine in Europe is made by cooperatives and I was fortunate to taste some of it during our recent visit to Italy. What makes these cooperatives different? (And can other wineries copy their formula for success?) Good questions. Look for answers in the next Wine Economist post.
I have three books to recommend if you are interested in the history of European wine cooperatives. The Red & The White: The History of Wine in France and Italy in the Nineteenth Century by Leo A. Loubére (1978), The Wine Revolution in France: The Twentieth Century also by Loubére (1990) and Vintages and Traditions: An Ethnohistory of Southwest French Wine Cooperatives by Robert C. Ulin (1996). The Red & The White is one of my very favorite wine books.
Good post, Mike. And thank you for your two sided analysis on this important subject. There are two sides to every story, as it is with European co-ops.
We import and retail 12 grower Champagne producers, 4 of these producers are co-ops. A trend that we see with our co-op producers is to utilize the community equipment, but to keep their juice separate from everybody else throughout the process. They press their own grapes, then take that juice and put it into tanks that they control. This is a relatively new co-op business model that allows them to share the fixed equipment costs, while maintaining their unique identity.
The co-ops that blend all of their juice together and then label the bottles separately can also make great juice, especially if the village is one of great quality and the chef du cave has the skills necessary to make it happen. There will always be the vignerons who are just grape growers and sellers. For them, the village co-op is a great alternative to selling their juice on the bulk market.
For us, there is no blanket statement on whether co-ops are good or bad, there are great ones, good ones, mediocre ones, and bad ones. It is up to the savvy consumer to decide which ones are worth drinking.
Readers might be interested in an discussion of this post on an Italian wine website. Here is the Italian-language original:
and here’s a link to an English translation: