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

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specialist wine magazines, to help this customer sector recognise the denominations of
Colchagua and Casablanca (Bisquertt, 2008).

Some wineries also stated that finding a market for high quality wine was hard. This is
especially due to imports of cheap Chilean bulk wines flooding some markets, like the
UK. Consumers in these core economies believe this wine is of good quality and do not
see the need to pay more for a higher quality wine. This problem can be combated by
improvement of image, and as Siegel (2008) says the problems of exchange rate means
companies cannot survive selling this way. Furthermore, ODEPA (2005), a governmental
organization, found that the demand for high quality wines is ever increasing so it should
become easier and easier to find a market for these wines.

A further problem was the increasing costs of labour and energy. Serrano says these costs
have nearly increased by 50% in the last three years. This can be targeted by increasing
quality of wines and therefore increased profits. This can also be done by increasing sales
on the on-trade section of the market. Gwynne (2006) says only 21% of Chilean wine is
sold in the on-trade but here the prices are higher and the image of the brand is improved.
This area needs to be targeted by firms hoping to improve profits.

Innovation has been critical in a large number of areas in Chile’s wine industry growth
over the past eighteen years. The newer companies (those established in the last two
decades of the twentieth century) have had a remit to go for organizational success in
their overseas policy - starting by focusing on supermarkets and then gradually going up

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