Firm Creation, Firm Evolution and Clusters in Chile’s Dynamic Wine Sector: Evidence from the Colchagua and Casablanca Regions



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and cloud cover in the morning. Coastal wine regions (as with Casablanca) have not only
cooler summer temperatures but also longer growing seasons (see Map Two).

Meanwhile, the heartland of Chilean wine production is now changing considerably but
tends to follow well-established west-to-east valleys to the south of Santiago. The
Colchagua Valley stretches from very near the coast (at Navidad or at Paradones) into the
central crux of the region in Santa Cruz and then onto the foothills of the Andes near
Chimbarongo (see Map 3). Much of this land is now well irrigated but requires a large
amount of good irrigation near the sea. Furthermore, inland it tends to get much hotter
during the day, but the warmer temperatures during the summer months still enjoys a
great diurnal range in temperature of between 15 and 20 degrees Celsius. Such high
diurnal variations in temperature during the summer months tend to produce quality
grapes due to the concentration of fruit flavours that hot days and cool nights tend to
generate.

Such a comparison of comparative advantage for vineyards generates the product
composition possibility for the quality production of both white and red wines. As a
general rule, quality white wines are produced nearer the coast and quality reds further
inland away from the cooling effect of the sea. At present, the tradition of Chilean wine
exports being dominated by red wine continues with about 70 per cent of exports
characterised by red varietals. Cabernet Sauvignon, Merlot and Carmenère account for
over 75 per cent of red wine exports; Syrah and Pinot Noir are coming up fast.
Meanwhile, white wine exports are progressing rapidly, with Chardonnay, Sauvignon



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