The Changing and Flexible Nature of Imitation and Adulteration: The Case of the Global Wine Industry, 1850-1914

The first globalization wave from 1850 to 1914 is considered to be a period when global trade and investment increased at a steady pace, impacting on global economic growth. Global trade, for instance, grew at an average rate of 4.5 percent per year between 1875 and 1914, a growth rate that was only paralleled again from 1980s. And yet that evolution was not consistent across all industries. This study explains why, during that period, global trade in wines and also in other alcoholic beverages was reversed. Apart from diseases that affected vineyards of the countries of the Old World that were main producers of wines, various factors in the New World including local government incentives, and the presence of consumers – immigrants - with acquired habits of consumption from European countries, created strong incentives for the dissemination of imitation and adulteration of wines. This study looks at the strategies used by both the imitators in expanding their businesses, and by the innovators to survive in institutional environments that were weak with regard to the protection of their intellectual property.