Globalization and wine business: Port wine

In the past two decades the world has seen acceleration in the process of globalisation, affectingvirtually all industries and consumers. The wine sector is no exception, witnessing increased exports andimports, decreasing consumption per capita in the producing countries, and a wave of direct foreigninvestment and mergers and acquisitions in the industry.Among European wine producers the Port wine can be seen as a representative case of globalisationand as a benchmark, because almost 90% of its production is exported. With this in mind, the mainobjective of this paper is to analyse the structure and behaviour of the Port wine chain in terms ofindustrial organisation and trade. To achieve this objective a survey about the role of organisations innational growth and descriptions of the European wine industry and of the Port wine chain wasconducted. Moreover, we identify and characterise the dynamics of production, price and trade of the Portwine after World War II.Despite the Port wine activity having been subjected to cycles there has been a trend toward acontinued increase in production and exports, stabilisation of real market prices and a slight increase inthe real prices paid to grape growers, leading to positive economic effects for Port wine firms and grapegrowers. The pro-active behaviour of Port wine chain agents contributed to this result, namely exporterswho were able to adopt market strategies to respond to the challenges of globalisation.