An institutional approach to the history of wine in brazil

The history of wine in Brazil dates back to 1532, when Brás Cubas tried to cultivate the vine on São Paulo coast. As we can imagine, it was not a very successful venture. Later, other efforts were made by Jesuits in the seventeenth century. In 1739 Portugal prohibited the production of grapes and wine in the colony and this prohibition lasted until the Independence of Brazil in 1822. Although it is interesting to mention those fledgling efforts to produce wine in Brazil, the decisive impetus for the Brazilian wine industry only began with the Italian immigration of the late nineteenth century. These immigrants from Veneto and Trentino Alto Adige settled in the Serra Gaucha and received land from the government, for which they had to pay later. Some of today famous Brazilian wineries, like Miolo and Casa Valduga, began as small canteens initiated by Italian immigrants. These immigrants had not the intention to build a wine industry when they arrived in Brazil. The primary intention was to make wine for their own consumption provided that wine was considered as a food, a part of Italian culture and tradition, not simply an alcoholic beverage. Therefore, wine industry in Rio Grande do Sul emerged to supply a cultural demand of the Italian immigrants. A different motive can be identified in the reasons of the implementation of a wine industry in São Francisco Valley, backcountry of Northeast Brazil. We could say that the region became economically interesting since the development induced by investments in irrigation, conducted mainly by CODEVASF. Therefore, the drive for wine production in Serra Gaucha was culture, while the drive for São Francisco Valley wine industry was the business opportunities engendered by institutional policies conducted on the region. In this article, I will consider the history of wine industry in Serra Gaucha and in São Francisco Valley through the lens of Institutional Economics, initiated by Thorstein Veblen in the late nineteenth century, reworked by new institutionalists like Douglass North, and continued today by authors like Geoffrey Hodgson and others. I suggest three institutional dimensions that are usually considered by the seminal authors of Institutional Economics: (i) rules of the game, they are the formal and informal rules that structure human interaction; (ii) mental models, consistent of ideologies, habits of thought and all the internalized rules of the game; (iii) organizations, that are groups of individuals acting together with an at least temporary common purpose. The objective of this article is to tell the history of wine in Brazil and to compare the different motives for wine production in those two Brazilian regions. The question proposed in this article is: which institutional dimension was more important for the emergence of a wine industry in Serra Gaucha and São Francisco Valley? The hypothesis is that not only government policies in the São Francisco Valley were important for the emergence of a wine industry in Brazilian backcountry, but also the know-how acquired in winegrowing in Serra Gaucha. This article is divided in five parts. The first section introduces the topics proposed in the article. In the second section, the institutionalist theory will be presented, based on the idea of the three institutional dimensions. In the third section, the history of wine in the Serra Gaucha will be told. In the fourth section, the motives for a wine industry in São Francisco Valley will be presented. Finally, the fifth section concludes the article