Beneficio Simplified

[Tom Archer]

Everyone in the port trade bats from their own corner - I know people in the trade who seriously advocate the entire removal of the Douro Superior from the demarcated area and I know others who make splendid ports from long held family quintas in that very region - it's not easy to take sides..

The core of the problem I think, is that Portugal has too much regulation - government really doesn't know best. Ultimately, market forces are the best way to shape and direct productive industry, with only the lightest touch on the regulatory front to prevent market manipulation or antics that might damage the reputation and integrity of a product class.

I would seriously advocate the complete suspension of the beneficio system to see what, if any, adverse consequences arose without it. My suspicion is that it wouldn't be greatly missed..

[Andy Velebil]

Everyone in the port trade bats from their own corner - I know people in the trade who seriously advocate the entire removal of the Douro Superior from the demarcated area and I know others who make splendid ports from long held family quintas in that very region - it's not easy to take sides..

The core of the problem I think, is that Portugal has too much regulation - government really doesn't know best. Ultimately, market forces are the best way to shape and direct productive industry, with only the lightest touch on the regulatory front to prevent market manipulation or antics that might damage the reputation and integrity of a product class.

I would seriously advocate the complete suspension of the beneficio system to see what, if any, adverse consequences arose without it. My suspicion is that it wouldn't be greatly missed..

I would disagree. It would be missed by the majority of growers, most of which own a tiny hectare or two. It wouldn't be missed by larger companies as they could cheaply grab up property when said small folks walk away from their vineyards as there's now no money to be had to survive on even their current meager income. And as larger producers produce Port for actually what it costs and not from an artificially inflated cost. Though even some of the larger producers who use it to subsidize selling lower priced table wines, who now would have to sell them for actually what it costs to make them, would not be happy as consumers willing to pay $10-15 per bottle now won't pay $30 for the same wine when there is nothing subsidizing them.

A big problem now is that the Beneficio been around for so long that any serious attempts to remove it in one big swoop would not be pretty. A gradual remove would lessen the impact but still have some serious consequences. The question is, is modern times already lessening that impact and to a degree changing it already? As I've stated before, many young people who were born and raised there want nothing to do with their parents chosen way of life on their tiny piece of the pie. And the Casa do Douro has been limping along for decades yet producers are forced to keep shelling out money to barely keep it afloat.

[Luc Gauthier]

Removing or restructuring any long in the tooth economic system (the SAQ and Nafta comme to mind) ain't gonna be easy .Since both the SAQ and the Beneficio were instituted both pre '50 , both need to be modernized to better reflect today's reality

[Tom Archer]

The problem with the current system is that it does not incentivise the optimal use of resources to achieve the highest possible product quality - indeed it has the exact opposite effect, resulting in many small growers who are wholly focused on quantity rather than quality.

Yes, any change in the status quo will deliver both winners and losers, and the abolition of the beneficio would create an emphasis on quality over quantity, as the very worst juice would struggle to find a market in those years when production exceeded sales. This is not necessarily a case of big growers getting one over on the little guy - the care and attention a small grower can foist upon vines he knows intimately can easily trump the quality of a grower operating on a more industrial scale.

Bear in mind that although the small growers have been allowed to market their products independently for a good many years now, the number who do so remains a very small percentage of the total. It does seem that the ghost of Portuguese feudalism has not been fully exorcised yet, and measures to reduce state interference and encourage free market thinking are likely to have a positive impact in that regard..

[Al B.]

I guess one way to look at the Beneficio is to consider it a tax to be paid to be permitted to make and sell a certain volume of port. Rather than the tax being paid to the government and the government then deciding how to spend it, the monies go straight into support to local low income families - those grape farmers and land owners who have land which is graded A-F and who are still growing grapes.

I'd love to know how much of this debate is a real problem and what volume / percentage of port is produced from grapes purchased from small landholders. Those are the people the beneficio is designed to support, not the grape farmer who has many hectares or the producer who also grows his own grapes.

[Glenn E.]

Unrestricted free market capitalism is bad in almost any form. See: US banking, US healthcare. The market cares only about short term profit, but most if not all products require unprofitable support structures of some sort in order to survive.

[Svein CE]

Unrestricted free market capitalism is bad in almost any form. See: US banking, US healthcare. The market cares only about short term profit, but most if not all products require unprofitable support structures of some sort in order to survive.

Hear, hear.

[Tom Archer]

For those of us who are old enough to remember the nightmare of the Soviets - and the many apologist regimes of that time..

The idealistic world of the nouveau socialists is really very scary..

Lesson from history: Capitalism has its faults, and when pursued without compassion, many faults; but socialist theory was the cause of untold human death and misery in the 20th century, and it's new advocates have no new answers..

To quote Hilaire Belloc:

'Never to let a'hold of nurse, for fear of finding something worse'

[Roy Hersh]

That itself is quite the curse.