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markets, through what Gereffi et al (2005) calls ‘organizational success’. In this firms
start at the lower end of the market and work up to the higher end with better quality and
better prices. A prime example of this from the Colchagua valley came through
interviews with Luis Felipe Edwards Junior (2008). The winery under the same name has
been able to increase its sales from 70,000 cases in 2000 to one million cases last year
(2007) and has invested significantly in vineyard estates.
This organizational success can be done by collaborating with supermarkets and creating
a wine for their own label. This was done by Montgras with Sainsburys supermarket in
the U.K (Middleton 2008). This is a good way to get oneself known by the supermarkets
and also by the consumers. Tesco, Sainsbury and Asda spent 20 to 40 million pounds to
promote their own brand labels in 2000, this is the kind of promotion that Chilean
wineries cannot afford to spend (Chaney, 2004). However, firms like Cono Sur and
Montgras, eventually broke out of these deals with supermarkets as there are low profit
margins involved and high quality wines (where there is the highest value) cannot be sold
this way.
User-driven and civic conventions of differentiation can be seen in both valleys
(Gwynne, 2006a). The Wine Law of 1995 now means the 'Denominacion de Origen’
differentiates both valleys. Civic conventions have also been carried out in both valleys
with Montgras in Colchagua becoming more organic (Valenzuela, 2008) and in
Casablanca Villard winery recently received the ISO 14001 Certification, as recognition
of their commitment to environmentally friendly agricultural practices.