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investing in the market. The impact of the entrance of these New World producers was
felt strongly by the quality wine producers of the Old World. The Old World had always
produced wines that sold the wine through its ‘terroir’, the unique soil and climate of a
region. However, in the New World lack of regulations meant the production process
could be experimented with and wines became based on just one or at most two grape
varieties, which were clearly stated on the packaging of quality wines.
It is interesting to note that neo-liberalism has led, in many countries, to more influence
from foreign companies. This was an effect that passed Chile over. Gwynne (2006a)
shows that of the largest 16 wineries in Colchagua only one or two are fully owned by
foreign companies and Olavarria et al (2008) show that 87% of investment in Colchagua
is national capital. It should be noted here that Casablanca has a higher influence of
foreign investment with two of the six wineries from whom information was obtained are
wholly or partly owned by foreign companies (William Cole and Villard). Of the
remaining four, three of the companies were set up by existing Chilean firms wanting to
expand their business.
When interviewee’s were asked about the future of the wine sector as a whole an
interesting number of firms suggested that in the near future there could actually be a
drop in the number of actors in viticulture in the Colchagua valley. As the Managing
Director of Casa Lapostolle, Patricio Eguiguren, pointed out in the 1990’s with the boom
in the industry a lot of firms entered the industry but it did not necessarily mean they had
the technological knowledge to make wines. Eguiguren then explains why these
vineyards set up in the 1990’s are going bust now: