World War I and the spread of Phylloxera to its vineyards took Algerian wine off the table as an issue for French producers; Algerian production fell from 10 million hl pre-war to 5 million hl in 1922. But this was a temporary state of affairs as rapid adoption of the American-rootstock technique, significant expansion in vineyard area (175,00 ha to 400,000 ha from 1925 - 1935), and high wine prices in France (23 francs/hl in 1921 - 1925; 32 francs/hl, 1926 - 1930) saw production grow to 20 million ha in 1935. Production declined to 1922 levels in the middle of WWII but was back up to 18 million hl by 1953.
On Algeria's independence in 1962 it had 360,000 ha under vine; by 2005 that number had declined to 25,000ha. Production was 15 million hl at independence and 600,000 hl in 2009. Exports were 14.8 million hl at independence and 17,000 hl in 2008. To what forces were these precipitous declines attributable?
Production (blue) and export (rust) data for the Algerain wine
industry. Smoothing obscures inter-point volatility.
Selected data points from Meloni and Swinnen time series |
Selected data points from Meloni and Swinnen time series. Smoothing obscures inter-point volatility. |
According to Meloni and Swinnen:
- Export constraints after independence. France had agreed to purchase 39 million hl over 5 years but, encouraged by domestic producers, failed to meet its obligations under the treaty.
- Poor management after the wine industry was nationalized
- The inability to find substitute markets. A deal in 1969 to supply the Soviet market was abandoned due to profit pressures.
While the authors mentioned poor management as one of the main reasons for the failure of the industry, they do not provide any quantitative or qualitative data to back up that assertion. Further, they failed to mention a number of potentially critical elements of the decline.
First, these selfsame authors had attributed the rapid growth of the Algerian wine industry to the 50,000 families entering the country after the Phylloxera infestation in France, bringing critical winemaking and management skills to the country. Is it not likely then that the 900,000 European Algerians who left the country after independence might have taken some of those skills (remember 97% of the vineyards were owned by French settlers) with resultant short- and long-term negative implications for the industry? Mongabay.com asserts that the Algerian wine industry was "severely handicapped by the sudden loss of foreign managers and skilled labor." In addition, many of the Algerians who had worked closely with the French pre-independence either fled the country or were killed shortly after independence. Could some winemaking and managerial skills also have been lost in this manner?
Second, the authors stress the loss of the export market but Algeria lost its domestic market also when the 900,000 Algerian-Europeans went home. And that market would never be coming back.
So these guys were screwed: they had lost their only export market; they had lost their domestic market; and they had lost the critical winemaking and management skills of the foreigners and locals who had "fled" the country. Add to this the "government view that dependence on wine was probably inappropriate for a muslim state" (Mongabay.com) -- another rationale that the authors failed to mention -- and you end up where Algeria is today. According to the authors, "From a global perspective, the Algerian wine industry has 'effectively disappeared.'"
This study was, overall, very digestible. It was an "old school" study which eschewed econometrics and mathematical economics in favor of time series data and associated analysis. I had some issues with the paper though. First, it seemed as though the authors tried to cram three separate studies into one: (i) The rise and fall of the Algerian wine industry; (ii) the bi-directional flow of wine-related legislation as it relates to France and Algeria; and (iii) the role of French wine regulation in shaping the direction of European -- nay worldwide -- wine regulation. Second, the authors failed to at least advance some of the decline-and-fall narrative that I have provided; and (iii) a little bit of modeling (using regression analysis and dummy variables) would have helped us to understand the relative importance of the provided reasons for the decline and whether other heretofore unidentified factors also contributed.
©Wine -- Mise en abyme
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