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

16

not endure the changes. The effect of this decrease was consolidation of Chilean wine
firms, with the larger wine firms buying up the smaller, struggling companies. There
were as many as eighty wine firms at the start of the 1980’s and by the end of the 1980s
this number had decreased to 15 (Arnold et al, 2002). It should be noted that at this time
there were very few firms producing wine in the Casablanca valley, so this decrease in
wine is an occurrence only in the Colchagua Valley.

In the 1990’s firm numbers started to increase again. At the start of 1991 Middleton
(2008) states there were 14 firms exporting wine in Chile and now, in 2008, that figure
has reached 250. This expansion is shown not only by the increase in number of firms but
also by the growth in exports sales from $20 million in bottle sales to total exports of
over $1000 million in 2007. The reasons for this proliferation of firms can be put down to
a varying number of factors; economic, political, consumer trends and exogenous factors.

Economically Chile had become an increasing power again; since 1986 the economy had
grown by 6.7% a year (Gwynne, 2006), giving actors the confidence they needed to
invest. Additionally, it was only from the 1990’s that foreign firms started investing in
Chilean wineries (with the exception of Miguel Torres). Examples of companies
investing are Rothschild in Los Vascos winery in Colchagua Valley, and William Stevens
Cole and French investment in Villard in Casablanca Valley. This increase in foreign
capital meant that there was easier access to better price ranges, better channels of
distribution and new technology (Olavarria et al, 2008, Gwynne, 2008a). Actors seeing
the advantages given to both valleys from foreign influences, led to an increase in
wineries as actors competed to gain access to these influences for themselves.

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