The DO, a Spanish model of ‘cooperation’



The former Minister of Agriculture, Miguel Arias Cañete, remembers perfectly the moment when it was decided to make the regulations more flexible to create a Denomination of Origin (DO) in the world of wine. The Vine and Wine Law, in 2003, when he met with producer Carlos Falcó, Marqués de Griñón, who died in 2020: “He argued that there were magnificent producers who were constrained by some DOs that were sometimes too inbred.” The new law allowed the creation of small, highly specialized denominations oriented to quality markets, and the incorporation of concepts such as paid wine or ‘terroir’ or signature wine.

This flexible regimen makes the
intention of the PNV to split the Rioja Alavesa from the Qualified Denomination of Origin (DOC) Rioja

An initiative that has put the role of these institutions on the table. A denomination of origin (DO) is a quality seal that identifies a product whose quality or characteristics are due to a particular geographical environment. They exist in Spain since the enactment of the Wine Statute of 1932, but they gained strength after joining the EU in 1986. One of the first measures that Spain had to adopt was to stop labeling sparkling wine as champagne because this term is a DO from the French region of Champagne. So the same year of our entry into the EU the denomination cava was created.

Although other factors play a role, ODs are a form of intellectual property. This refers its existence to the debate on the impact of patents. We have just experienced it with the development of the Covid vaccine and the possibility of licensing its manufacture: there are those who argue that without patents innovation would be impossible, while there are others who consider that they are a hindrance to it.

The Spanish experience with DOs in the wine field from 2003 on is very successful. These have not only prevented the relocation of the value chain, linking it to a specific geography, but also innovation and quality have increased, in an example of how you can combine cooperation and competition (cooperation) in a virtuous way. “I think one of the reasons why DOs are different from patents is that they have an individual beneficiary, whereas DO protects an entire region,” argues the professor. Jose Luis Sanchez Hernandez, from the Department of Geography of the University of Salamanca.

Sánchez is a pioneer in applying the ‘worlds of production’ scheme to the analysis of Spanish wine, a theory proposed in 1992 by Robert Salais and Michael Storper. This raises the existence of different product families based on two dimensions: technology and the market.

Technology discriminates between specialized production and standardized, depending on the degree of generalization of knowledge to produce something and if there are economies of scale. The specialized technologies have to do with a production carried out by a small group of experts, while the standardized with automated procedures.

Market type differentiates between generic and dedicated, the first corresponding to markets made up of many anonymous buyers, and the second to personalized markets, with a small number of consumers. This scheme gives rise to four intersections or ‘worlds’: the interpersonal (specialized-dedicated), that of the market (standardized-dedicated), that of the innovation (specialized-generic) and the industrial (standardized-generic).

In 2017, Samuel Esteban, a professor at the University of Zaragoza and a disciple of Sánchez, published ‘Changes in the protected designations of origin of the wine sector in Spain: movements between production worlds’. The results of the study portray the remarkable evolution of the sector. If in the 1985-86 campaign there were 29 active DOs, in the 2012-12 academic year they amounted to 90. If between 1986 and 2001 1.8 DOs were created per year, between 2000 and 2013 there were 2.8.

Esteban classified the producers in the four ‘worlds’ and discovered very relevant facts. While in the 2001-02 season, the producers framed in the ‘industrial world’, who were looking for undifferentiated markets where they compete for price and their results depended on the volume sold, represented 48.89% of the Spanish DOs, this amount fell to 25.76% in the 2012-13 academic year. In contrast, the DOs of the so-called ‘interpersonal world’, which seek niche clients and use highly specialized technologies, were barely 17.78% at the beginning of the century and rose to 43.94% in 2012-13.

The success of the 2003 regulation in revitalizing the wine sector is highlighted by both Esteban and Sánchez. Not all DOs are equally prosperous or have the same vision, but the Spanish framework has contributed to competitiveness in a way that is difficult to understand in other latitudes. For example, the Anglo-Saxon world is still very reluctant to abandon the concept of standardized production and admit the value of uniqueness, even though the need for traceability is revolutionizing all of this.

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