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Varietals of capitalism a political economy of the changing wine industry

Varietals of Capitalism

A volume in the series

Cornell Studies in Political Economy
edited by Peter J. Katzenstein
A list of titles in this series is available at www.cornellpress.cornell.edu.

Varietals of Capitalism

A Political Economy of the
Changing Wine Industry

Xabier Itçaina, Antoine Roger,
and Andy Smith

Cornell University Press
Ithaca and London

Copyright © 2016 by Cornell University
All rights reserved. Except for brief quotations in a review, this book, or
parts thereof, must not be reproduced in any form without permission
in writing from the publisher. For information, address Cornell University
Press, Sage House, 512 East State Street, Ithaca, New York 14850.
First published 2016 by Cornell University Press
Printed in the United States of America
Library of Congress Cataloging-in-Publication Data
Itçaina, Xabier, author.
  Varietals of capitalism : a political economy of the changing wine
industry / Xabier Itçaina, Antoine Roger, and Andy Smith.
   pages cm — (Cornell studies in political economy)
  Includes bibliographical references and index.
  ISBN 978-1-5017-0043-9 (cloth : alk. paper)
  1. Wine industry—Economic aspects—European Union countries.
2. Wine industry—Government policy—European Union countries.
I. Roger, Antoine, author. II. Smith, Andy, 1963 July 24– author.
III. Title. IV. Series: Cornell studies in political economy.
  HD9365.A2I73 2016
 338.4'7663200904—dc23   2015032412
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List of Figures, Tables, and Text Boxes
List of Abbreviations

Introduction: Wine and the Politics of Economic Change


The Analytical Challenge of Economic Change


1. Existing Approaches to Change in and beyond the
Wine Industry


2. Structured Contingency: Institutions, Fields, and
Political Work


Shaping and Negotiating Deep Reform


3. Knowledge and Power in the Scientific Field


4. When Political Work Shifts to the Economic Field


5. Adopting Reform within the Bureaucratic Field


vi  Contents

Implementing Change: Reinstitutionalization
or Reproduction?


6. The End of Interventionism?


7. From New Wine Categories to Resegmented Markets?


8. Microeconomic Support: New Instruments in Old Bottles?


Conclusion: A Glass Half Full



Figures, Tables, and Text Boxes

1. Institutionalist economics
2. Regulationist economics
3. Sociological institutionalism
4. Actor-network theory
5. An industry as an order of four institutionalized relationships
6. The internal logic of a field
7. An industry as a set of fields and an institutional order
1. The four dominant approaches to socioeconomic change
as applied to the wine industry
2. Percent of wine distributed by supermarkets in 2004 by value
3. Distribution of wine in France by volume
4. Top five specialized wine companies in 2005
5. Wine sold by multibeverage corporations in 2005
6. Representatives at the Challenges and Opportunities
for European Wines seminar
7. Volume of wine produced and used for crisis distillation
by region in 2009
8. Vines grubbed out in France, Spain, and Italy, 2008–2011
9. Number of AOCs and VdPs per select EU member state
in 2012



viii  Figures, Tables, and Text Boxes

Text Boxes
1. Basic principles of actor-network theory
2. Azpilicueta, Domecq, Pernod Ricard: A story of
concentration/deconcentration in La Rioja
3. Grands Chais de France: From outsider to dominant player
4. The history of six Romanian wineries
5. Tuscany: Antinori and Chiantigiane
6. Timeline of the reform
7. The “reflection document” issued to the participants at the
February 2006 seminar
8. A comparison of the European Commission’s proposal
and the regulation adopted by the European Council
and European Parliament




The research for this book was financed by the French Agence Nationale
de la Recherche within the program Gouvernement européen des industries
led by Andy Smith and Bernard Jullien from 2010 to 2014. Along the way,
our reflections have been nourished by the following colleagues who all, in
­different but decisive ways, contributed to our work by commenting upon our
initial results and papers. We thank in particular Thierry Berthet, Marc Blyth,
Caitriona Carter, Clarisse Cazals, Pierre François, Philippe Gorry, ­Colin Hay,
Bernard Jullien, Laura Michel, Matthieu Montalban, Tomaso Pardi, Claudio
Radaelli, Sigfrido Ramirez, Filippo Randelli, Raphaël Schirmer, Jean-Marc
Touzard, and Axel Villareal. Sigfrido even took an active part in some of
our fieldwork in Italy and Madrid. We also thank Cornell University Press’s
anonymous reviewer and Peter Katzenstein for their perspicacious and
­encouraging comments on earlier versions of this manuscript. Responding
to their promptings for more clarity and rigor has been a challenging but
rewarding experience. More generally, Peter and Roger Haydon at Cornell
have been highly supportive throughout. Notwithstanding all this assistance,
we of course take total responsibility for what follows.
From a different but equally supportive angle, we also take this opportunity to thank those who have provided us with technical and logistical support where we all work, at Bordeaux University’s Centre Emile Durkheim.
Particular thanks go to Myrtille Birghoffer, Dominique Nguyen, and Caroline Sagat.
Finally, we thank all the practitioners who gave up their time to be interviewed for this study. Without the input of such people, the political economy we practice would be both impossible and meaningless.




Appellation d’Origine (Designation of Origin)
Appellation d’Origine Contrôlée (Registered
Designation of Origin)
Appellation d’Origine Protégée (Protected
Designation of Origin)
Asociat¸ia Producătorilor şi Exportatorilor de Vinuri
din România (Association of Romanian Wine
Producers and Exporters)
Asociación Agraria de Jóvenes Agricultores–Asociación
Riojana de Agricultores y Ganaderos (Agrarian
Association of Young Farmers–Association of Farmers
and Breeders from La Rioja)
Common Agricultural Policy
Confederación de Cooperativas Agroalimentarias de
España (Confederation of Agrifood Cooperatives of
Comité Européen des Entreprises Vins (representative
body of the EU industry and trade in wines)
Conseil Interprofessionnel des Vins de Bordeaux
(Interprofessional Body of the Bordeaux wines)
Common Market Organization (Organisation
commune de marché)
Coordinadora de Organizaciones de Agricultores y
Ganadores (Coordination of Farmers’ and Breeders’
Consulenti per la Gestione Aziendale (Business
Management Consultants)

xii  Abbreviations

Confcooperative Confederazione Cooperative Italiane (Italian
Confederation of Cooperatives)
COPA-COGECA Comité des Organisations Professionnelles
Agricoles—Comité général de la coopération
agricole de l’Union Européenne (European
Farmers’ Organizations Committee—European
Directorate-General for Agriculture and Rural
Development (European Commission)
Denominazione di Origine Controllata (Registered
Designation of Origin) (Spain; chapters 4, 8)
Denumiri de Origine Controlată (Controlled
Designation of Origin) (Romania; chapter 7)
Denominazione di Origine Controllata e Garantita
(Registered and Guaranteed Designation of Origin)
Denominaciones de Origen Protegidas (Protected
Designations of Origin)
European Court of Auditors
European Parliament
Federación Española del Vino (Spanish Wine
geographical indication
Indication Géographique Protégée (Protected
Geographical Indication)
Indicazione Geografica Tipica (Typical Geographical
institutionalized relationship
Organisation internationale de la Vigne et du Vin
(International Organization of Vine and Wine)
Organizat¸ia Nat¸ională Interprofesională Vitivinicolă
(National Interprofessional Wine Producers’
Office national des vins
Patronatul Nat¸ional al Viei şi Vinului (National
Association of Vineyard and Wine Production
Vin de Pays
Vin sans IG (wine without geographical indication)

Varietals of Capitalism

Wine and the Politics of Economic Change

The wines of Europe are often spontaneously associated with traditions
and places that are seen as timeless. “Bordeaux” today evokes red wines that
can be kept for decades and stone-walled villages such as Saint-Émilion, and
Chianti is invariably linked to the “unique” history and landscape of Tuscany. However, even the occasional drinker knows that wine from these areas
has changed considerably over the last generation. Moreover, most tourists
visiting these regions soon learn that the contemporary production of wine
bears little relation to the folkloric imagery of horse-drawn plows and peasants treading grapes.
Whether they are practitioners, journalists, or academics, most specialists
agree not only that European wine has been changing for centuries but also
that this change has accelerated over the last twenty to thirty years. However, there is disagreement about what the drivers of this change are. For
many, European wines have changed simply because reductions in domestic consumption in large producer states such as Spain have forced producers to seek new markets abroad. For others, change has been fueled above
all by the rise of exports from New World countries such as Australia and
South Africa (globalization),1 and then by the realization of European wine
producers that they would have to compete directly with them. Yet another
interpretation attributes change to alterations in the way public authorities
in Europe have intervened in wine markets through public policies and leg-

1.  The category “New World” was in fact invented by American and Australian producers
at the beginning of the 1990s to highlight their common interest in taking on their European
competitors. It has since been extended to include businesses in South Africa, New Zealand,
Chile and Argentina.

2  Introduction

islation. Rather than add another partial explanation of why European wine
has changed so fast and so deeply, this book provides a holistic account that
draws not only on original empirical research but also, more fundamentally,
on a new standpoint in social science debates about economic change.
We believe that understanding change in an industry such as the wine
industry can be fully captured only by developing a generalizable perspective on its politics. What determines or obstructs such change? What are the
scope conditions for its occurring and then “sticking” during implementation? These are fundamental questions raised in various academic disciplines, in particular research that uses concepts and methods taken from the
new institutionalism. While we draw on certain institutionalist theories of
change, we nevertheless propose a sharper focus on the politics of economic
activity that refuses to dodge key conceptual choices in the name of seeking
consensus. We believe that it is vitally important to reshape and restate the
analytical program of an institutionalism in a way that focuses on both agency
and what structures it. Our explanation of how and why European wines have
changed therefore illustrates a sustained theoretical proposition that asserts
that the cause of economic change relates to structured contingency: actors
prepare and make such change in institutional orders that are deeply socially
configured and highly constraining.
This proposition combines the tools of constructivist approaches to institutionalism (Hay 2006a; Abdelal, Blyth, and Parsons 2010), Bourdieu’s theory of fields (1992, 1993a, 1996, 2013), and a Weberian sociology approach
to political work in industries (Jullien and Smith 2011, 2014). The resulting
analytical framework has been developed and refined around a major empirical study that focused on the negotiation and implementation of a reform of
the European Union’s (EU) wine policy that was formally adopted in 2008.
The content of this reform is now generally accepted as radical because it
has shifted public support away from measures designed to directly affect
the supply of wine, then moved it toward concentrating instead on demand.
More precisely, since 2008:
• The EU has abandoned direct intervention in wine markets through the

subsidized distillation of surpluses.
• A final campaign has used EU funds to grub out 175.000 hectares of vines

across Europe.
• Laws that once prevented European producers from making wine using

specific techniques that are permitted elsewhere in the world have been
• New, simplified categories of European wine have been created.
• Efforts to better promote European wines in non-EU countries have been
partially financed by public authorities.
• A range of “modernization” grants have been distributed.

Wine and the Politics of Economic Change  3

The effects of this reform have been both considerable and highly varied.
Why was this reform so readily accepted in 2008, after years of bitter resistance at both EU and national scales to parts of its content and much of its
underlying rationale? Just as important, why do almost all commentators on
the wine industry not even consider these questions? Specifically, why have
they consistently reduced explanations to one or more of the following three
1.  The reform had to happen because globalized wine markets made it
necessary for EU producers to align themselves with changes in “demand.”2
2. This globalization was a reaction to interdependent shifts in “consumer
demand” on the one hand and corporate ownership and behavior on
the other.
3. The EU could no longer sustain an interventionist wine policy because it
costs too much and because the World Trade Organization had outlawed
it as trade-distorting.
Notwithstanding the confidence with which these accounts of the reform have generally been expressed, even our initial research on the reform
quickly revealed that none of them actually fit the information we gleaned
from documents and interviews. On the contrary, although consumption of
wine has clearly changed since the 1970s, it has never sent unambiguous signals to producers that they simply had to change their products and modes of
marketing. Markets are actually deeply complex and thus provide uncertain
information, a point that seriously undermines the claim that one universal
vision of current demands for wines ever existed, let alone affected producer
and merchant behavior automatically. Similarly, the companies involved in
growing grapes, making wine, and then selling it have clearly also changed
considerably in recent years. As in so many other industries, a concentration
of ownership and vertical integration has occurred in many wine regions.
However, this process is still far from completely dominating the world’s wine
industry, especially that of Europe, where relatively small operators continue
to predominate. In addition, the concentration of wine companies has not
translated automatically into changes in how producers or merchants construct and represent their interests. As we will show, changes have indeed occurred in this direction, but none of them directly affected the construction
and implementation of the EU’s 2008 reform. Finally, the budgetary cost of
the EU’s wine policy and the influence of the World Trade Organization also

2.  Throughout this book, we use “new consumer,” “supply,” and “demand” not as neutral
and descriptive categories but as terms used as a weapon by many of the actors we have studied. They will be enclosed in quotation marks at only the first use in each chapter.

4  Introduction

clearly need to be taken into account in any explanation of policy change.
The 2008 reform did not decrease the EU’s costs; instead, it reshaped them.
Although EU representatives often invoked the force of World Trade Organization law as a motive for change, in practice such declarations legitimized
what they were already seeking instead of being a primary cause of change.
In short, very little of the standard explanation of the 2008 reform stood up
to the test of even our first few weeks of empirical investigation.
The more we strove to answer the questions Why this reform? and Why in
2008?, the more we had to examine closely the expertise that surrounds the
making of commercial and political decisions, the shaping of interest groups,
the organization of public authorities, and the way a supposedly common EU
policy has actually been implemented in the vineyards of Europe. Specifically, as the closing section of chapter 2 sets out in detail, fieldwork in Brussels and national capitals and comparisons of four member states (France,
Spain, Italy, and Romania) and major vineyards in those states (Bordeaux,
Rioja, Chianti, and Romanian vineyards considered as a whole) provide the
empirical evidence on which we base our answers to queries about change in
the wine industry. This fieldwork also grounds in empirical evidence our answers to the general social science questions about the politics of economic
change that we raise throughout this book.
Our starting point for rethinking economic change is a reaffirmation that
politics is and always has been an omnipresent driver of the economics of
wine. Moreover, this politics is deeply multiscalar (global, EU, national, regional, vineyard), although this multiscalarity is neither new nor specific to
wine. However, its shifts over the past twenty to thirty years have contributed
considerably to the conditions for the deep change in EU policy and the effects of this reform, which, as will be seen, have varied in revealing ways from
country to country and vineyard to vineyard. This book shows that the 2008
reform synthesized a process of change that has spanned more than twenty
years. We insist that the changes recounted in this book cannot be reduced
simply to the legislative changes adopted in 2008. Instead, a more revealing
story about change caused by structured contingency needs to be told to
capture what created the conditions for that reform and has since shaped its
To substantiate these claims, we open with theory positioning. A refusal
to seriously address the politics and multiscaled structuration of economic
activity and the importance of policy implementation is a common failing of
much commentary on European wine. Put bluntly, chapter 1 shows that four
major theory-driven interpretations of change in the European wine industry
are incomplete or wrong. More fundamentally, it identifies why the general
assumptions about politics, economics, and change that underlie each of
these four approaches—namely institutionalist economics, regulationist economics, sociological institutionalism, and actor-network theory—urgently
need replacing. The first two of these approaches are excessively material-

Wine and the Politics of Economic Change  5

istic. Although their claims contrast sharply, they both interpret policy and
political change as the consequence of exogenously caused changes in stocks
of material resources and power. In contrast, analyses based on sociological institutionalism and actor-network theory are insufficient analytically because they give excessive explanatory weight to the interactions between individuals and groups (or objects). In so doing, and despite their considerable
differences, they focus on the positioning and repositioning of firms within
networks and underestimate the unintentional resonances between differentiated, historically structured, and partially autonomous spaces.
Elements of each of the four theories mentioned above are of course
worth retaining, but we maintain that other sources of concepts and questions are needed to build a coherent alternative analytical framework. This
is the aim of chapter  2 which, as noted above, is inspired by constructivist
approaches to institutionalism, and the sociologies of Max Weber and Pierre
Bourdieu. Our generic approach to the causes of economic change, which
we call structured contingency, has three key components.
The first is a conception of economic activity as structured by institutions
that are both highly structuring and fundamentally contingent. Institutions,
which we define as stabilized rules, norms, and conventions, are the artifacts around which industries such as wine are regulated. In so doing, they
produce an institutional order that provides a certain degree of stability for
economic activity but is also fraught with tension and likely to evolve.
Following Bourdieu, we consider this relationship between stasis and
change to be structured most deeply by the spaces of action we call fields.
These spaces reflect both the objective positions of actors and the outcomes
of struggles for symbolic hierarchization. Strong differentiation between
fields is an initial consequence of this structuration (here we will focus on the
economic, scientific, and bureaucratic fields; i.e., those most relevant to our
case study). A second consequence is that each field is underpinned by its
own logic, organized around specific issues, and driven by a balance of power
that is relatively autonomous from other such spaces. Third, fields are also
multiscalar: a local field exists within larger ones (e.g. national, European,
global) that are built around the same issues but entail a greater number of
positions. Furthermore, struggles in several different fields will at times coincide. However, this is rarely because individual actors manage to bring them
together through their entrepreneurship. Instead, interfield connections or
transfers need to be analyzed in terms of accidental institutional resonance.
The third and final part of our analytical framework directly tackles the
dynamism of fields and thus institutional orders. Instead of reducing such
dynamics to the social skills of individual actors or organizations, we claim
that they are the consequence of political work, a process that is conditioned
by the contingent coincidence between fields and is consistently threefold.
First, it encompasses the activities that define what constitutes the public
problems that dominate policymaking over a particular period of time. Sec-

6  Introduction

ond, political work generates the instruments through which public and collective actors seek to regularize the treatment of the aforementioned problems. Finally, both problems and instruments are constantly worked on from
the angle of legitimation; that is, how actors seek to justify and normalize
them through discourse and symbolic action.
Using this analytical framework, Part 2 focuses on the preparation of the
EU’s 2008 reform and on the academic struggles that oriented the progressive institutionalization of demand-centered arguments in the wine industry,
the work commercial, associative, and public actors did to recycle and diffuse the ideas this new paradigm conveyed, and, finally, the negotiation of
the reform in 2006–2008. Chapter  3 focuses on the relationship between
knowledge, science, and power that lay behind the 2008 reform. Mobilizing
a dynamic conceptualization of fields, we show that the role played by the sciences of vine and wine was a precondition for the production and legitimation of a new approach to the government of this industry. Chapter 4, which
focuses on the 2002–2005 period, builds on this analysis. This time span was
marked by new challenges to EU policy and an increase in the political work
carried out along lines merchants and deviant producers traced in the new
paradigm; that is, by actors located in the wine industry’s economic field.
During this period, these two sets of actors began to propose a new approach
to the EU’s government of the wine industry. By the mid-2000s, the very definition of the problem had already changed for a large number of key actors.
Crucially, alternative definitions of the problem had either been stigmatized
or were not even opened for discussion. Chapter 5 zeros in on the adoption
of new EU legislation over the years 2006–2008. Not surprisingly, bargains
were struck and deals were made among actors from the bureaucratic field
to get the reform package through. However, debate was no longer about
deep issues of policy direction and substance because these had largely been
settled previously.
Part 3 concentrates on implementation. Our aim here is to analyze the
institutionalization of the reform and assess whether the degree of change
announced in 2008 has actually taken place. In general, we find that implementation has indeed substantiated the deep change announced at the time
of the reform. In particular, it has sustained the contention that only wine
that fits with the demand of what is frequently labeled the “new consumer”
is economically sustainable and merits EU support. In addition, merchants
have gained legitimacy and power in this new version of EU government, to
the detriment of the growers. However, the implementation of this reform
has been heterogeneous and has led to differentiated institutionalizations.
In order to explain both the changes in the industry prompted by the reform
and the diversity of forms it has taken, Part 3 addresses the three main types
of policy instruments it has affected. Chapter 6 focuses on the drastic reductions in the deeply interventionist dimensions of previous EU policy. These
instruments previously sought to control most wine prices by limiting the

Wine and the Politics of Economic Change  7

supply of grapes produced and the supply of wine entering markets. In order
to encourage EU wine producers to accept the abandonment of this policy,
a second aspect of the 2008 reform concerned the reprograming of markets,
the focus of chapter 7. Here the reformers sought to assist European wine
producers and merchants by restructuring the range of wines they produced
and simplifying how they are presented to the public, a shift in policy and
practice that was legitimized by once again evoking the practices of challengers from the New World. In the mid-2000s, initial reaction from producers
to the European Commission’s proposals on these issues was often hostile.
However, translating them both into action has thus far been a relatively
smooth process. Finally, chapter 8 focuses on the EU’s microeconomic measures (subsidies for promotion, restructuring, and investment) that sought to
improve the competitiveness of its wine producers and merchants. The 2008
reform placed a great deal of emphasis on regulatory policy tools as a way
of reprograming markets, but has not meant that the EU has abandoned all
budgetary support for the wine industry. Instead, the reform has transferred
much of the money that was previously spent on grubbing out vines and
distillation to microeconomic measures aimed at improving the competitiveness of individual firms and regional vineyards. However, our fieldwork shows
that in practice, actors differ widely in the economic and social value they
attach to these microeconomic measures. Reactions to and interpretations
of the reform as a whole have varied, but not simply due to material deter­
minants. Instead, the causal mechanisms our research identified concern the
extent to which regional actors located in both the economic and bureaucratic fields have “normalized the policy paradigm” (Hay 2006a, 59) at the
heart of the 2008 reform.
Overall, and beyond the wine industry, we aim to contribute to two interrelated general academic and political debates. The first relates to understanding the government of the EU as a whole. From our perspective,
European policies stem from a complex set of contingent political work
conducted in the economic, scientific, and bureaucratic fields. As we shall
demonstrate, this stance distinguishes us from the materialistic perspectives
that argue that EU governmentalization is nothing more than the reflection
of power struggles between economic interest groups. It also rejects an intergovernmentalist perspective that reduces EU policy to the mere output of
bargaining between member states. We focus instead on the mechanisms of
a complex process of decision making and institutionalization that is specific
to the European scale without isolating the bureaucratic field from its economic and scientific counterparts. In addition, our approach seeks to grasp
the whole process of an EU-driven policy change—from the premises of the
reform through its implementation—to capture the thickness of the institutionalizations in which change or stasis occurs.
Secondly, as our conclusion underlines, we not only call for a reassessment
of institutional change and reproduction in the European government of

8  Introduction

wine; we also maintain that the structured contingency approach we use to analyze the wine industry could usefully be extended to other parts of social science devoted to economic phenomena and potentially way beyond this area
of inquiry. What follows is therefore just as much about studying the politics of
change in general as it is about understanding the reorientation of European
wine. In this sense, the analytical model we advocate aims first at contributing
to the ongoing rich but currently stalled debate about types of institutionalism. Second, and more fundamentally, our approach to politics within structured contingency raises a challenge for and proposes a contribution to the
deep scientific debate about the changing relationships between individual
actors, social structures, and institutions. Indeed, although this book’s title
is partly tongue in cheek, what follows is very much about variations within
contemporary capitalism and how they can and should be studied.

Part I

The Analytical Challenge
of Economic Change

Analyzing the 2008 reform of the EU’s wine policy provides a way of reflecting more generally on the ways that industries (and thus economies)
change. Our object of study has already been put to the test by four major
theoretical models of empirical inquiry: institutionalist economics, regulationist economics, sociological institutionalism, and actor-network theory.
Chapter 1 presents each of these theories and their application to analysis of
the contemporary wine industry. However, envisaging economics as the result of individual calculations, interactions, or macrostructural factors, none
of these theories provides a sufficiently complete and convincing explanation of economic change. Chapter 2 builds an alternative analytical framework to capture not only the dynamics observed in the case of EU wine policy
but also the dynamics we consider to occur recurrently in all economic activity. Although we share a commitment to the institutionalism many colleagues
in political science and sociology espouse, the originality of our structured
contingency approach lies in its documentation of the role fields play in socioeconomic activity. This approach also seeks to innovate by identifying how
coincidences between fields can create space for the political work that, we
hypothesize, brings about institutional change or stasis.

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