Port wine value chain: from the Douro Valley to Oporto Cellars

Abstract

Purpose The purpose of this paper is to offer an insight into the fundamental changes taking place in Port wine production value chains. Specifically, the authors examine two distinct production regimes: when Port is aged and sold in the Greater Oporto and, alternatively, when it is produced, aged and sold in Douro. Design/methodology/approach The authors apply a tri-regional input–output model (Douro, Greater Oporto and rest of the country) for Portugal’s economy. This framework comprises a significant level of detail, with 431 products and 136 industries, the corresponding supply and demand for the products, by industry (for intermediate consumption) and final demand. Findings This study shows that the two regimes generate noteworthy, but quite heterogeneous, regional impacts. In both cases, the distribution of value added generates international and interregional trade flows. Moreover, the study reveals a greater capacity to capture national value added by getting the supply chain more intensive in localised services and by using state-of-the-art production techniques. Originality/value Using detailed regional data, the authors use disaggregated information, both for industries as well for territories, overcoming a common limitation in similar works that are grounded in international databases. Additionally, the approach integrates the trade interactions among industries and regions, which proves essential to uncovering spillovers resulting from the (direct and indirect) use of inputs from other regions and other countries.

Prosecco has another story to tell: the coexistence of multiple knowledge networks in the same value chain

“…The oenologists hired by the larger companies tend to hold several positionssometimes even as partnersand are the main protagonists of the exchange of knowledge within the cluster. This shows both a network effect (Casali et al, 2018) and represents supply chain behavior (Ferreira et al, 2018).…”

“…From the development of a new product to the stepby-step control of its production, many technologies are required to ensure stable production (Borsellino et al, 2020) of a good whose simple exposure to oxygen can completely change its unique organoleptic properties. The use of the same technologies (only varying in terms of supplier) by all companies guarantees a knowledge base that is largely shared at the technical level (Ferreira et al, 2018). This explains why the technology acquired by larger companies is further passed later to smaller companies (Borsellino et al, 2020).…”

“…For issues arising in this stage, advice from an agronomist is essential and can strongly affect the vines' final yield (Mitchell and Schreiber, 2007). Such advice is knowledge that is distributed throughout the value chain, creating a territorial effect (Ferreira et al, 2018). In this sense, leadership is exercised by the companies in the cluster in a democratic way through the sharing of specialized professional figures.…”

“…Another study investigated the supply chain of port wine. Having researched 136 companies, Ferreira et al (2018) showed that value generation differs across different value chain models. The chain is more effective when it links local services and local product knowledge.…”

The impact of COVID‐19 on global value chains: Disruption in nonessential goods production

“…The article "iPadded: The trade gap between America and China is much exaggerated" describes fragmentation in the case of production of the iPad. (The Economist, 2012).2 As an example, in a work concerning the Portuguese economy,Ferreira et al (2019) highlights that 2.1% of the Port wine's final value results from "oil extraction and drilling" that happens outside the Portuguese territory.3 This is explained in detail in Section 4.4 Unfortunately, more recent intercountry data are not available, and the processes involved in updating a multicountry…”