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Date:         Fri, 30 Oct 1998 12:37:26 -0500
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Subject:      Rosenthal on Brennan _Burgundy to Champagne_
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H-NET BOOK REVIEW
Published by [log in to unmask] (October 1998)

Thomas Brennan.  _Burgundy to Champagne:  The Wine Trade in Early
Modern France_.  The Johns Hopkins University studies in historical
and political science; 115th series, 1.  Baltimore:  Johns Hopkins
University Press, 1997.  xxi + 350 pp.  Bibliographical references
and index.  $39.95 (cloth), ISBN 0-801-85567-5.

Reviewed for EH.NET by Jean-Laurent Rosenthal, Department of
Economics, UCLA. <[log in to unmask]>

In a country that prides itself 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 brokerage, 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_.

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