Kent Benson wrote:Hi Dom,
Thanks for all the inside scoop!
A few years ago I ran across this quote from Pedro Branco of Quinta do Portal: “The benefício is a bit of paper that gives a producer the right to add brandy to must, and therefore make Port. Every year you receive a letter telling you how much Port you can make, and this quantity will vary according to Port stocks, the market, the vintage forecast, and so on. The benefício is tied to vineyards, and therefore to grapes. Legally, you can sell someone your benefício with the grapes that it relates to. But what sometimes happens is that people just buy or sell the piece of paper without the grapes. For table wines, you don’t need a benefício, so if you had a great vineyard but didn’t want to make Port from it, there would be a benefício going spare. Or if you had some fantastic grapes and you wanted to make more Port than your current benefício permitted, you might buy someone’s benefício but tell them to keep their grapes.”
How big of an issue is this? Does it ever impact your dealings with growers?
Hi Kent, that's pretty much it, a good description.
It’s an extremely complicated issue. The Benefício was designed when Portugal was administered under a Corporate State system (The right-wing Salazar Government).
Although clearly it’s very interventionist, it worked reasonably well while the Douro Farmer only produced grapes for Port, essentially forcing the price of grapes up by limiting supply and therefore obliging the Port Trade to “subsidise” the community.
It also had a secondary effect of maintaining a reasonable stability of supply, as Pedro mentions, the amount of Benefício allocated annually would vary depending on global demand, stock management requirements etc.
It can be complicated if a Port producer only accepts the benefíco part of production.
One must remember that the Douro vineyard area has expanded hugely in the in the last 20/30 years due to planting subsidies, but as mentioned previously, global port sales have slipped more than 10% in total volume and account for some 50% of total grape production. The Douro wines account for some 25%/30% therefore there is a regional excess of production. Normally this would mean a drop in prices, the supply and demand would find a balance and everything would continue. The benefício system protects the farmer from these vagaries of economics.
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That's a fantastic achievement for Dow, SFE, and Port wine in general.![[friends.gif]](./images/smilies/friends.gif "Friends"){kind=small}