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Published by EH.NET (October 1998)

Thomas Brennan, Burgundy to Champagne; The Wine Trade

in Early Modern France. Baltimore: Johns Hopkins University Press, 1997.

376 pp. $39.95

(cloth), ISBN: 0801855675.

Reviewed for EH.NET by Jean-Laurent Rosenthal, Department of Economics,

UCLA.

In a country that prides it self on its wine tradition, one often easily

forgets how many revolutions have occurred in the wine economy. Thomas

Brennan’s monograph takes up the transformations of the commerce of Northern

French wine in the century before the Revolution. Based on an elegant mix of

secondary histories of particular wine traders (negociants) and wine growers

and of archival sources, the book offers a careful description of the

transformation of the wine trade between 1700 and 1789. More

importantly, Brennan avoids the pitfalls of localism by taking in both

Burgundy (a high quality but distant producer) and Champagne (a producer of

varying appeal but more proximate) and by careful reference to the other major

vineyards of the area (Paris and the Loire Valley). Because these two regions

had significantly different experiences, generalizations are not easy to come

by.

The book is a dialogue between the history of Burgundy and Champagne, with

occasional forays into the wider world of Parisian and French wine brokerage.

In the chapters on Burgundy and Champagne,

Brennan bring into sharp relief the importance of information and credit in the

commerce of wine. Brennan’s focus is on expensive wines for which price is much

more a reflection of quality than of quantity.

Yet quality is elusive because urban buyers (whether rich consumers or wine

merchants) simply cannot take the time to comb the countryside for a particular

wine. Hence, there was a great need for brokers. The monarchy had, at first,

regulated brokerage

by forbidding individuals who took this occupation from selling wines on their

own account. The hope, one presumes, was that brokers would, therefore,

put all their efforts into satisfying their clients. Furthermore, by limiting

themselves to strict broke rage, these intermediaries left the buyers and

sellers to bear the risks involved in the market.

Yet, other developments in the wine industry made such distinctions impossible.

Two elements in particular made them more active. First,

because of their privileged “expertise,” the brokers could hardly resist the

jump from negotiating deals to speculating on their own accounts.

Second, because of their information, they were the ideal financial

intermediaries for the wine economy that included both wine retailers and wine

makers.

As brokers they purchased wine on credit and sold wine on credit, for they

were paid neither when they received nor when they delivered an order, but when

the buyer could pay. They, in turn, attempted to delay payments to vine

growers as much as possible. Because the trade was on a credit basis, brokers

had to bear risk–the jump from the risk associated with lending to buyers, to

the risk of buying wine on ones own account was small. It was also virtually

impossible to detect

.

What official could tell whether a broker sending wine from Epernay to Paris to

a wine merchant was acting at the direction of the merchant or on his account?

There were other more local reasons for the growth of the role of brokers.

Distant markets

required high quality wines which, in turn,

required increased investments in an activity that was already capital

intensive. Yet those investments were not without risk. Brokers,

because of their knowledge of demand and because of their keen knowledge of

local conditions, were ideally placed to bear those risks. As Brennan

describes, the development of sparkling Champagne was the result of a

“redevelopment” of a region whose previous product

(red wine) had fallen out of favor. Despite the legend of Dom

Perignom single-handedly inventing the bubbly, the reality is that its growth

into a marketable product was fraught with obstacles that the brokers slowly

removed. First, wine was typically transported in barrels (which were cheaper

and more robust) rather than bottles, but Champagne had to be bottled quickly,

so as to capture the second fermentation that leads to the sparkles. Second,

the bottles had to be strong enough to resist the increased pressure–no small

feat in a period of blown glass–and losses due to exploding bottles could be

devastating at times.

Hence from simple retailers, brokers took on an important role in shaping the

market’s product at the local level. Because the demand for high quality wine

in Paris was, after all, limited and because the Northeast faced competition

from the Loire and the Bordelais, brokers took on the task of developing or

regaining markets in Northwest Europe.

Though we learn an enormous amount from Brennan’s monograph, the economic

historian may be a bit

chagrined with the analytical structure.

Central to the volume are two distinctions: first, between a transparent market

where buyer and seller meet in public and pay cash, and that of an opaque or

private market where buyers and sellers need not meet, where transactions are

hidden from the public and where credit greases the wheels of commerce; second

between competition and power. Here Brennan is less clear about the dichotomy,

but individuals who are attributed economic power have informational and/or

financial advantages over other protagonists. This reviewer wonders about the

value of either opposition.

As Brennan himself recognizes, transparent markets only allow a very limited

number of transactions. Further opacity need not imply a lack of competition

if all parties are accustomed to the process. Similarly, to call informational

advantages “power” hardly helps our understanding.

One can, however, read the volume with an eye to the different gains that

the expansion of markets could offer. Some were temporary, for instance when

a sudden increase in demand for a particular type of wine was not met by an

immediate increase in supply. This short-run gain would be captured by

brokers, but would rather quickly translate into higher prices in the

countryside. Then there would be the traditional response of planting more

vines which would drive prices down again.

After a while the only change in the countryside would be higher employment.

There is an alternative long-term scenario. This one had more complex effects

on the local economy, because it involved the development of wines whose

qualities could not be easily reproduced (that was the case for both Champagne

and Burgundy). Here brokers enjoyed some

early profits from finding the demand for

that wine,

but in time much of the final value of that wine would be transferred to the

owners of the land. For the past several hundred years at least, France has

been a battlefield between the efforts of quality wine producers to limit

imitation and the

efforts of others to make more of what is desired. Brokers, whatever their

information and their power, contributed to this battle by first selling high

quality wine and then seeking out new sources of such wine. Further

consideration of the nature of land and information rents in the wine industry

might lead us to a better understanding of why the commerce of wine failed to

be centralized in Paris and rather remained the domain of a plethora of local

brokers. Those scholars who will take up this task

will be grateful for the existence of

Burgundy to Champagne.

Jean-Laurent Rosenthal Department of Economics UCLA

Jean-Laurent Rosenthal is author of The Fruits of Revolution:

Property Rights, Litigation, and French Agriculture, 1700-1860

(Cambridge

University Press, 1992).