Appellations of Origin in Spain and France during the Twentieth Century. Quality and Reputation in Sherry Wine.1

Abstract

Appellations of origin were created in France after a long legislative process in the early twentieth century in order to protect growers' interests against the drop in demand and the competition from imitations, cheapest and standardized wines. As a result of constraint rules on control quality, the appellation production was small and inelastic, which involved difficulties to achieve economies of scale and scope. Laws on French appellations were adopted by the Spanish administration in the 1930s to create its own denomination of origin but in a particular and national sense, being Sherry the first Spanish denomination (1935). Unlike the French appellations, quality controls and regulations of the Sherry appellation protected shippers' interests, as large geographic area was initially established and the use of foreign wines of neighbouring regions to be bended with Sherry was permitted. In contrast, brands were the major source of add value in Sherry industry and provided a guarantee of continuing standards of quality to consumers.