Trade and terroir. The political economy of the world’s first geographical indications

Abstract

The world’s first geographical indications (GIs) were in the wine sector and focused on the delineation of the location of production, the ‘terroirs’: the Burgundy wines in the fifteenth century, the Port wines and Chianti wines in the eighteenth century, and the Champagne wines in the early twentieth century. We analyze the causes for the introduction of these GIs (‘terroirs’) and for changes in their delineation (expansion) later on. Trade played a very important role in the creation of the ‘terroirs’ but the mechanisms through which trade stimulated GIs varied. For the Port and Chianti GIs it was exports to foreign markets (Britain) that were crucial; for Burgundy it was domestic trade to Paris; and for the Champagne GI it was not exports but pressure from wine imports and new wine regions that played a crucial role. For the expansions of the GIs later in history, other factors seem to have been more important. Expansions of the GIs in the years and centuries after their introduction followed (1) major changes in political power; (2) the spread of a new philosophy in liberal and free markets across Europe; (3) and infrastructure investments which opened up markets and made exports cheaper from “new” producers.