In 1978 the United States Bureau of Alcohol, Tobacco, and
Firearms (ATF) created the first regulations for geographically labeling and
recognized by the Government. In Italy specific wine laws had been created and
were functioning since 1963. These two systems worked in different ways to
create regulations both in the United States and Italy viewed as necessary. For
the ATF the regulations allowed the establishment of any viticulture areas
which allowed the winery to establish a specific geographic label. The American
regulations require the winery or coalitions of wineries to meet specific
criteria of the ATF. In Italy wine law has four specific tiers of regulation
and therefore supposed quality assurance by the Italian government. These
regulations can include specific varieties of grapes allowed, how much can be
grown, and other regulations imposed on these winemakers. These are D.O.C.G,
D.O.C, Vini Tipici, and Vino da Tavola, and IGT. The D.O.C.G and D.O.C wines
area confined to areas of significance or historical importance with an
established reputation for the winery. IGT is the government recognized wine
label which opts out of the rest of the wine regulations. The IGT can still be
high quality wine but removes the grower from the regulations of the other wine
designations. In the United States there are no such a system.
There are four areas of economic issues related to wine
which can be further examined. These are the exclusivity principle, problem of
the commons, value conveyed by official governmental recognition and approval
of appellations, and issues involving consumers. The exclusivity principle is
private property rights of a resources ability to exclude others from the right
to exclude others to a resource. In the case of wine making winemakers used
lawsuits and consortiums to create consistent quality. The next issue with wine
is the problem of the commons. The problem of the commons is common resources
in which excessive use can occur as everyone has access to the land and no
incentive not to over use the land. Most wine areas do not have a single owner
for a wine label instead these areas have many growers all of which can use the
same label. The issue here is that overproduction of inferior wine can occur
with some wineries producing more causing harm to all the wineries in the area.
To deal with the issue of overproduction before specific wine laws in Italy for
example, private agreements were created and successfully enforced. Official
governmental recognition and approval is as the name implies the government
recognition of a specific area of wine production which in the Italian case can
be enforced by law. The recognition has value and can use this for economic
benefit as it is a transfer of wealth from the government to the vineyard. Even
without government recognition the names have value. The recognition does
enhance the value of even these already named wines. The final economic issue
is consumer issues. For the consumer the names of the of geographically
specific wines is not beneficial unless the wines have different tastes which
the consumer can detect. The consumer will decide which are the best properties
of wine and choose to purchase such wine. The regulations both in the United
States and in Italy worked to address the economic issues.
Outside of Trento we visited a winery which belong to the
IGT. For this particular winemaker the D.O.C.G and the D.O.C regulations were
too burdensome and she choose to be IGT as it offered her far more freedom.
Though I am not particularly qualified as a wine coinsurer, as a consumer I
found the wine produced at this winery of a high quality. Thus I found IGT does
have a high quality and as a consumer I would choose to buy this particular
vineyards wine. Understanding the regulations which are faced by winemakers it
is clear some winemakers will choose to abstain from government control and
choose instead to guarantee quality through consumer taste and reputation. Therefore,
even today wine law in Italy is significant and those who are producing wine
must still choose what regulations they want to be under.
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| Winery outside of Trento, Italy |
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