Flexible theory and flexible regulation: collaboration ...

Environment and Planning A 1995, volume 27, pages 41-61

Flexible theory and flexible regulation: collaboration and competition in the McLaren Vale wine industry in South Australia G Haughton Centre for Urban Development and Environmental Management, School of Environment, Brunswick Building, Leeds Metropolitan University, Leeds LS2 8BU, England J Browett Centre for Development Studies, School of Social Science, Flinders University of South Australia, GPO Box 2100, Adelaide 5001, South Australia Received 15 March 1993; in revised form 10 December 1993

Abstract. A case study of the McLaren Vale wine industry is used to challenge four areas of the regulation debate. First, the uniqueness of some of the key features underpinning the periodisations of accumulation regimes and their associated modes of social regulation is questioned. Second, concern is raised over the extent to which 'new industrial districts, can really be described as engaging in 'new' practices. Third, the importance of local regulatory mechanisms is emphasised. Last, the importance of nonstate, nonlegislative forms of regulation are highlighted. Change and continuity in regimes of accumulation Geographers, planners, institutional economists, and others have begun to pay increasing attention to regulationist analysis, which emphasises that the dominant social and economic structures of capitalist development are being radically restructured, as part of a shift from one dominant regime of accumulation to another (Lipietz, 1987; Peck and Tickell, 1992; Tickell and Peck, 1992). Drawing on the periodisations of the Regulation School, they have argued that capitalist development is shifting from an intensive, or more popularly Fordist, regime, towards some form of a post-Fordist system. Amongst the characteristics of the new regime which are most discussed in the geographical literature are the emergence of new forms of labour market, labour process, and production flexibilities, which collectively provide elements of what has been termed flexible specialisation (Piore and Sabel, 1984; Scott, 1988). Related to these is the observation of the apparent success of a number of 'new industrial spaces', 'industrial districts', or other geographical concentrations of closely networked firms (Sengenberger and Pyke, 1991). These are held to be marked by a variety of interfirm collaborative practices which allow firms to work independently but to achieve some of the economies of scale of large firms, whilst maintaining the advantages of specialisation. In the present study we look at these issues in the context of the development of the Australian wine industry, in particular through a case study of the McLaren Vale area, south of Adelaide in South Australia. In particular we identify historical continuity in traditions of interfirm collaboration. Important in the local processes of change has been the influence of local traditions and cultures, particularly in terms of agrarian traditions and the pioneer aspect of development in the area. Indeed, in this view much of the 'flexibility' observed in the McLaren Vale may be at one level simply 'a state of mind', albeit one which is closely bounded by the structures and dynamics of particular economic and political power relations. Local and national regulatory structures are identified as an important aspect of continuity and

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G Haughton, J Browett

enablement in the development of the McLaren Vale wine industry, including legislative and voluntarist, and formal and informal forms of regulation. Flexible theory In this review we concentrate on a range of analyses which have some relation to the Regulation School approach, some explicitly so, whereas some can be readily extended to incorporate elements of the regulationist approach. In particular, we look at how this approach has incorporated the notion of flexibility into its accounts of contemporary industrial change, possibly overemphasising the historical uniqueness of some of its contemporary manifestations. So, although historical evidence of flexibility is acknowledged, flexibility is usually held to have receded for much of the 20th century (Storper and Scott, 1990). One of our arguments in this paper is that regulation theory has itself been flexibly used by some commentators, who appear to overperiodise some of the supportive practices associated with successful production systems. For instance, many flexible production practices have a longstanding and continuous history in some sectors and in some areas. These practices have evolved and changed over time, and one of the key challenges for regulation research is to understand and chart this evolution, rather than account for a supposed sudden emergence of new practices which conveniently fit in with the notion that a new era of industrial production is underway. Part of the problem identified here relates to the near exclusive concern of regulation theory with capitalist industry as a discrete entity, usually concentrating on urban-based production systems. This has marginalised the role of other production systems, in particular family-based agrarian systems operating within capitalist economies. In recent years a considerable literature has emerged debating the role and importance of family farms within a capitalist mode of production. Whereas Friedmann (1978; 1980) sees petty commodity producers as a distinctive, relatively autonomous element within the capitalist system, marked in particular by noncommodified labour relations within the family network, other commentators argue that this sector has been penetrated by capitalist production systems and instead debate the extent to which this is partial or total (see Moran et al, 1993). The issue of greatest relevance in the present analysis is not the extent to which petty commodity producers isolate themselves from capitalist markets, but rather the way in which they have evolved a particular set of social and production relations which allow them to compete successfully within these markets without being wholly subsumed by them. Of particular value is the work of Lem (1988) on interfarm relationships in supporting the efforts of winemakers in Languedoc, France, to improve the quality of their wine and their market position. Whilst acknowledging the importance of noncommodified family labour, Lem extends her analysis to examine the nature of relationships between households within the rural sector, where labour and machinery can all be borrowed not on a commodified, financial basis, but rather on the basis of mutual exchange, implying a long-term reciprocal exchange of assistance across the range of such factors. Joint ownership of machinery was also not uncommon, allowing family farms to obtain access to equipment, and therefore allowing economies of scale in production, where in isolation they would have been too small. These nonmonetary transactions can provide a way of allowing those farms involved to compete with ventures more firmly rooted within the capitalist market system, in particular the large agribusinesses. Regulation theory which is cast purely within a framework of capitalist markets inevitably fails to draw out such important elements of related production systems and those 'grey' areas of the economy where

The McLaren Vale wine industry

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production relationships are not entirely market driven. In the process the nature of long-standing practices of local collaboration and social regulation which have underpinned the activities in some sectors of the economy have been neglected, only to be rediscovered and reinterpreted within regulationist accounts of local industrial success stories. A central theme in the regulationist literature is the search to explain the ways in which the capitalist system attempts to resolve its recurring crises, which occur as part of a regular swing from periods of stability to periods of instability (Jessop, 1990). Regulation theorists have attempted to periodise these crises and their resolution into particular regimes of accumulation, in the process aiming to identify the modes of social regulation which both characterise and indeed enable new stable regimes to emerge. As this is a well-documented and increasingly diffuse debate (for instance, see Brenner and Glick, 1991; Jessop, 1990; 1991; Peck and Tickell, 1992; Tickell and Peck, 1992), our intention in this review is to concentrate largely on two particular dimensions; the periodisation of accumulation regimes and the putative emergence of new industrial spaces, characterised by what have been termed flexible specialisation practices. A crosscutting theme is an examination of particular conjunctures of both informal and formal supportive regulatory systems, at a local as well as a national level. The concern with these two particular elements relates to the case study material presented below, which points to some of the continuities as well as the discontinuities which can be subsumed within this periodisation, and in particular to the long-standing provenance of some 'flexible accumulation' practices. This leads to a questioning of the assumed unilinearity and unidirectionality in the emergence of regimes of accumulation and modes of social regulation which a crude interpretation of the regulation literature might suggest. It is possible to identify two main accumulation regimes operating in the 20th century (Aglietta, 1979; Lipietz, 1987; Tickell and Peck, 1992). First, there was the continuance of an extensive accumulation regime, which lasted from the mid19th century to the First World War. This regime was accompanied by a mode of social regulation which relied on competitive, economic liberalism. The role of the state in this regime was essentially noninterventionist, attempting to foster competitive regulation, where market forces provided the framework for negotiations between businesses and between individual employers and their work forces. In doing so, according to Aglietta (1979), the regime sowed the seeds of its own downfall, as the combination of oversupply of labour and suppressed demand associated with unfettered labour markets, denied the rise of mass consumption. The interwar period marked a period of crisis and experimentation in production and supportive modes of social regulation, which witnessed the gradual emergence of a new 'intensive' (see below) regime of accumulation. Its initial stages according to some accounts were still accompanied by competitive regulation (Brenner and Glick, 1991). Particularly important at this stage was the emergence of new ways of organising the labour process, where the emergence of Taylorist and Fordist principles were part of a move towards mass production achieved through a greater fragmentation of the technical division of labour. This created a tendency towards selective deskilling and reduced autonomy in work practices, which came to be compensated for in part by the linking of productivity gains to wage increases, in the process making the link to mass consumption (Jessop, 1990). After the Second World War, an intensive regime accompanied by monopoly regulation emerged in effect as dominant, lasting through to the economic crises triggered by the rise of oil prices in 1974. The intensive regime of accumulation is

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popularly associated with the term Fordism, though the two are far from coterminous and Fordism in particular remains a much overextended characterisation of a particular accumulation regime and mode of regulation. In particular, it is oversimplistic to equate Fordism and mass production both with each other and with a common characteristic of rigidity: as Sayer (1989) notes, capitalist industry always combines both flexibilities and inflexibilities. Indeed, even Fordist labour relations have to be negotiated and bought, and could be presented as an example of the worker as partner and collaborator (Amin and Robins, 1990). Underpinning the intensive regime of accumulation was a 'monopoly' mode of social regulation, which was temporarily able to resolve some of the contradictions of earlier regimes by supporting the growth of mass consumption and mass production simultaneously. Most notably, this was attempted through a macroeconomic regime based on Keynesian demand management as a means of (partially) controlling economic cycles and the creation of the welfare state to support both consumption and the conditions for the recreation of labour power. Other important elements include attempts to regulate the nature of interfirm competition and labour - capital relations, both legislatively and through corporatist styles of negotiation between the major power players, such as trade unions and employer representative bodies. From 1974 onwards the consensus on macroeconomic management and welfare state support policies was increasingly challenged. In addition, the rigid labourprocess practices associated with Fordism and the linking of wage increases to productivity came to be seen as untenable, as a period of global crisis in capitalism was entered and as capitalist competition and production processes became increasingly international. In consequence there is a general acceptance that Western capitalism has moved out of its intensive regime of accumulation: but there is little or no consensus around what is coming in to replace it. This said, there is a widespread acknowledgement that experimentation with various forms of interfirm and labour-process flexibility is a central element either of the attempt to establish a new regime, or indeed of the new regime itself. The flexible accumulation thesis is perhaps the most developed analysis so far of the main features likely to be associated with the emergent regime of accumulation, a regime often referred to under the generic term post-Fordism. The general debate around post-Fordism has suffered in some part from the adoption of weakly defined notions of Fordism (Jessop, 1991) and an implicit assumption that its influence was more pervasive than in fact it has been. Likewise, the transition towards some form of flexible accumulation regime as the dominant feature of post-Fordism has assumed an unwarranted degree of acceptance, where the features of the current phase are seen to represent those of a new regime of accumulation, as opposed to those of a period of transition (Thrift, 1989; Tickell and Peck, 1992). The key features of flexible accumulation are widely seen to include experimentation with labour-market and labour-process flexibility, and new forms of interfirm collaboration in the production process (Scott, 1988; Sengenberger and Pyke, 1991; Storper and Scott, 1990). Doubts must exist, however, about the extent to which Fordism is as yet being supplanted by a new regime characterised by flexible accumulation, rather than simply remoulding existing forms of Fordism or creating new forms of organisation around it (Hudson, 1989). Studies which simply show an absence of the traits of the new flexibility in a particular sector no more undermine the case for flexibility than would single-sector studies which purported to show that Fordism is or was a myth; they do point, however, to the need to exercise caution in interpreting evidence of flexibility in every new working practice. Doubtless in its early stages, Fordism could be regarded as embodying some element of flexibility, and in


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its later stages too as production went global, flexibility could be discerned from some perspectives (Amin and Robins, 1990). Perhaps, as Schoenberger (1989) suggests, it is the direction of change which is the distinguishing characteristic of the new flexibility. The flexible specialisation thesis provides a variant on the flexible accumulation theme, elaborating on the role of geographical agglomerations of successful industrial firms along sectoral lines, drawing on the experience of a limited number of localities and regions deemed to have undertaken a successful transition towards a post-Fordist regime (Piore and Sabel, 1984; Scott, 1988; Sengenberger and Pyke, 1991). These areas are said to be characterised by, amongst other things, networks of firms working together, in a competitive yet collaborative fashion. The range of collaborative practices spanned is potentially massive, ranging from subcontracting work to each other, to joint marketing arrangements. Geographical proximity is seen as central to the evolution of such systems, as this reduces transaction costs, can allow local demand thresholds to be achieved for the provision of specialist support services, and can improve innovation as firms either share knowledge with each other or rapidly mimic or improve upon each others' advances. One of the main distinguishing features of the claimed shift away from mass production systems, with their emphasis on vertical and horizontal integration of production within single large companies, is the (re)emergence of complex ties across the supply chain involving a multiplicity of firms within a more fragmented production system. Large companies, in particular the large purchasers such as retailers Marks and Spencer pic, can buy from a variety of producers, dictating delivery schedules and quality conditions and even advising on machinery purchasing and training within ostensibly independent subcontracting supply firms. Clustering of firms is not an essential condition in itself for such close supply-chain links, except perhaps where these links are tied to the demands of just-in-time production schedules. Another important element associated with flexible specialisation is the evolution of shared cultures and trust relationships, which can be the vital ingredient in a technology-sharing agreement: these kinds of relationship cannot be forced on an area, nor can they be readily replaced by the relative anonymity of the phone and the fax machine. Indeed, Harrison (1992) notes that it may well be the embeddedness of socialised trust relationships in an area which is central to the success of industrial districts. The spur of local competition to greater innovation is a variant theme, which relates to Porter's (1990) views about the factors which can lead a nation or region to achieve competitive advantage in a particular sector. Whereas Porter sees state regulatory activity as largely antithetical to this process of competitive collaboration, others have drawn the message that there is an important role for the state to facilitate local collaborative ventures, not least in technology transfer (Best, 1990). But creating a supportive local mode of social regulation involves much more than state subsidy of joint ventures, such as fashion centres and technology parks. It implies a host of formal and informal, state and nonstate regulatory activity, from firms entering into no-poaching labour agreements with each other to evolving trust relationships over time such that technological secrets can be shared between contractors and subcontractors (Sengenberger and Pyke, 1991). It is valuable to reconsider at this stage the agrarian and family farm tradition of complex reciprocity between different production units in a rural context, where relationships are market driven in some respects, but closely wedded to complex kinship and community ties. This is a sector with a tradition marked by local social regulation practices and associated forms of collaboration which have endured in their basic characteristics over many centuries, whilst also evolving in some respects.

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Traditional small-scale craft industries have similarly often involved collaborative practices which have been sustained over centuries, and have endured through different capitalist regimes of accumulation. It is possible to claim that some form of interfirm collaboration has in fact provided an enduring feature of precapitalism, the early extensive regime of accumulation, the intensive regime of accumulation, and flexible specialisation. This said, collaboration amongst large firms in Fordism in production matters was limited, which may be a distinguishing feature of that regime. But this has to be set against the oligopolistic behaviour of firms in market delimitation and price setting within some sectors. It seems, therefore, that neither flexibility nor collaboration are in themselves exceptional in terms of the national and local modes of social regulation associated with other regimes of accumulation. Just as writers such as Hudson (1989) and Tickell and Peck (1992) have argued that any one nation or area at any one time might host a mixture of pre-Fordist, Fordist, and post-Fordist forms of labour process and production organisation, so it is possible that certain features of particular modes of regulation may characterise all three accumulation regimes. Flexibility and collaboration, mobilised in different ways, may well be two such common attributes of more than one regime of accumulation, rather than distinguishing features of just one. Much regulationist analysis has been overly concerned with national and international modes of social regulation and regimes of accumulation, concentrating in particular on the formal aspects of regulatory control. However, as Tickell and Peck (1992) have forcefully argued, local modes of social regulation may be a central element in supporting successful production systems more generally. Relatedly, there is a considerable range of possibilities both for voluntaristic and state-led, informal and formal forms of local social regulation. This diversity of possibilities is important in reaching an understanding of the complex local web of social regulation mechanisms, which can mean that, rather than identifying key elements as everywhere relevant to successful local production systems, it may be how these elements are combined at the local level which is of critical importance. Here the concern is with local flexible regulation, where the word flexible needs to be emphasised because regulation is not necessarily a wholly virtuous and benign activity at any scale, including the local and regional. The example of the urban industrial craft guilds in Beverley and York, in Yorkshire in the United Kingdom is an apt one. These areas were the centre of a successful wool textiles industry, until in the late 13th century vigorous overregulation in the form of increasing levies and taxes, and growing numbers of bylaws impeded the growth of local firms. By contract, those businesses to the west without these imposts, and therefore with relatively low costs, were able to expand at the expense of their neighbours and gradually overtake them in importance. In a more contemporary vein, some of the current problems of Silicon Valley, California, in terms of high labour costs, high labour turnover, and labour poaching, can be attributed in part to the absence of local regulatory mechanisms (Tickell and Peck, 1992). In the following sections the Australian wine industry is used to provide an intriguing example of a sector with pre-Fordist, Fordist, and post-Fordist traits, where 'flexible' practices have been in existence from the colonial pioneer days of pre-Fordism through to the present, albeit changing in form over time. In the process in the analysis we challenge a number of areas of the current regulation debate. First, we question the uniqueness of some of the key features underpinning the periodisations of accumulation regimes and their associated modes of social regulation, in particular examining the evolving nature of flexibility in various forms.


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Second, we raise concern over the extent to which the so-called 'new industrial districts' can really be described as engaging in 'new' practices, whilst adding some evidence of how some of these practices have evolved over time. Third, we echo Tickell and Peck (1992) in emphasising the importance of local regulatory mechanisms, and raise the question of how these evolve from, evolve with, or evolve into, national and international modes of regulation. Fourth, we highlight the importance of nonstate, nonlegislative forms of regulation, in particular examining the nature and construction of local practices which informally, sometimes barely perceptibly, exercise an influence on the development of successful local production systems. A related concern of the analysis is to examine how local regulatory structures and practices have interacted with national ones, in supporting the emergence of particular 'flexible' relationships, which in turn have helped the industry to improve product quality, increase output, and increase market share in changing conditions of global competition. New versions of old regimes in the Australian wine industry? Aspects of national regulatory support mechanisms To set the context for the case study, in this section we examine the wine industry at a national level, in particular looking at institutional regulatory responses to periodic production crises and changing global market conditions. In addition, we look at corporate global restructuring in the wine industry and the emergence of local boutique wineries. Regulatory support has accompanied the growth of the Australian wine industry since the mid-19th century (from the 1860s on), initially operating on an individual state or colony basis, as federation did not take place until 1901. One of the results of this fragmentation was that each state had its own trade restrictions for wines produced in other states, hampering the growth of a national market and consequently large wineries. Federation and the removal of many internal barriers did lead to a short burst of activity, with some companies expanding their sales into other states. In the case of South Australia, this drive to expansion was underwritten by state government subsidies for grape production. The interstate expansion in trade proved over time to be sporadic in nature, largely because of the many cycles in the buoyancy of the wine industry, which is subject both to the natural cycles of climate and to economic cycles of growth and decline. Economic cycles for the wine industry have in some part reflected national and international buoyancy, but with an important internal component of volatility resulting from periodic crises of overproduction. Periodic overproduction is endemic within agricultural production more generally, frequently giving rise to a need for regulatory activity. The tendency to overproduction has constantly bedevilled the Australian wine industry, from the early days through to the present. For instance, short-term price rises tend to lead to massive investment in vine planting, yet by the time the vines have reached sufficient maturity for harvesting, market conditions may have changed or, alternatively, the scale of plantings may lead to chronic grape surpluses, driving the price down once again. The twin problems which have accompanied this have been a continuing undersupply of premium quality grapes and an oversupply of grape varieties used mainly in the production of bulk or fortified wines. The main response of grape growers to these chronic crises of overproduction has been to form producer cooperatives. They were formed in the Riverland towards the end of, and after, the First World War, first to process surplus dried-vinefruit grape varieties for distillation and later to make wine from grapes derived from vineyards planted under the Repatriation of Returned Soldiers Scheme.

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Overproduction crises resulted in the establishment of additional cooperatives in the 1920s, 1950s, and 1960s. Born out of adversity and recrimination against wineries which refused their grapes, the cooperatives did little to promote interfirm collaborative practices, except amongst themselves. However, the sheer size of the grape intake into the cooperative wineries (until recently amongst the largest in the country) did allow them to achieve significant economies of scale in production. The responses of successive governments to supply crises have been attempts to regulate grape prices in particular (mainly by setting minimum prices), plus the provision of planting bonuses and tax incentives for grape growers, export bounties for winemakers, and subsidies for vine-pull schemes. Minimum prices have mainly been associated with the South Australian wine industry, where they have aimed at price stabilisation and underpinning an orderly marketing policy. Given the split in the wine industry between grape growers, who naturally want higher prices, and winemakers, who prefer lower prices, price setting inevitably has its tensions. One of the problems of the minimum price mechanism has proved to be that it insulated growers to some extent from changing consumer preferences for wines, and therefore for different grape varieties. Up until 1977 the determination of minimum prices reflected the changing costs of production rather than reflecting supply and demand considerations. This lent itself to occasional overproduction of specific grape varieties. Faced with wineries unwilling to buy all the available supply even at minimum prices, grape growers had either to leave part of the harvest to rot, or to use it themselves, thus avoiding the minimum price mechanism. Though this latter option has had the advantage of stimulating a number of producer cooperatives and small family wineries, generally speaking these tended to attract the less marketable grape varieties and the lowest quality grapes. This in turn has led on occasion to wine production of uneven and sometimes poor quality. Minimum price mechanisms had more or less been abandoned by the early 1990s because of some of these difficulties. The quality theme is an important one for the Australian wine industry, because poor-quality exported wines have led to major market losses in the past. At the national level, attempts to regulate the quality of exported wines are led by the Australian Wine and Brandy Corporation and the Australian Wine Research Institute, which check samples from each batch of exported wine. At the local level, however, there is no equivalent of the district quality approvals of France (appellation controlee), Italy (denominazione d'origine controllata), or other European winegrowing nations. This said, there are examples of quality control, notably in the Hunter Valley in New South Wales, and national legislation ensures that wine is made from grapes grown in the region named on a bottle. The downside of the lack of formalised, local regulatory control has been some problems of district-wide quality assurance and a limited ability to create and project particular images for different areas as a marketing tool. Alternatively, a positive aspect has been that the lack of local regulation has not limited the quantity or the grape varieties grown and the varietal, blended wines which can be produced (Mayo, 1991). Provided the wines are subsequently labelled appropriately, wineries can obtain their grapes or wine from any source they want for their blending, stretching at one stage to imported bulk wines from Europe. In consequence, Australian wineries around the country have been able to shift since the 1960s from the relatively uniform, undistinguished, bulk produced wines which previously dominated, responding to consumer pressures for more varied wine styles. This is part of a broader transition which is still taking place within the Australian wine industry from being production driven to being market led. As part of this renewed, market-led growth in the


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Australian wine industry it is important that various aspects of what might be termed 'flexible specialisation' practices, in particular interfirm collaboration, are almost inherent to the industry and are practices with a considerable history. These practices have facilitated sustained exponential growth, first in the domestic market and, over the last decade, in a variety of export markets. Several further regulatory forces have been prominent in the development of the Australian wine industry. Of continuing importance have been the ways in which the state has assisted in marketing, setting up the Wine Overseas Marketing Board in 1929, with London offices opening the following year, in 1930. In 1960 the Board joined seventeen of the major Australian wine exporters to establish the Wine Centre in Soho, which acted as a central supply point for the UK market until it was closed in 1982. Since then companies have mainly operated either on their own or through UK representatives (Ilbery, 1990), although there are examples of winemakers jointly marketing their wine overseas. However, in 1992, in recognition of the need to encourage the spectacular recent growth in wine exports, the Australian Wine Export Council (AWEC) was launched to support the industry's target of A$l billion exports by the year 2000. With substantial financial support both from state and from federal governments, the AWEC seeks to coordinate and strengthen the marketing efforts of Australian wine producers. In terms of quality control, a central regulatory element is that new grape varieties are both vetted and experimented with by government research bodies. From the 1960s increasing numbers of new grape varieties and strains were approved, an important factor because previously severe restrictions had been in place as part of a protracted effort to control against outbreaks of vine disease. Research and development on grape varieties and winemaking technologies have been led by the Australian Wine Research Institute, created in 1955, funded by an industry levy, supported by matching government funding. In July 1992 the Co-operative Research Centre for Viticulture came into existence. Funded by the federal government, the centre undertakes research, education, and informationtransfer activities. In addition, the educational infrastructure of the wine industry exercises a considerable influence both in formal and in informal aspects of regulatory support. Central to this has been Roseworthy Agricultural College, established in South Australia in 1883. Wine industry training here started in the 1890s, and in the 1930s a dedicated course was initiated. In 1971 a further centre of national importance was set up in Wagga Wagga, serving the fast-expanding New South Wales industry in particular (Mayo, 1991). Roseworthy College has been important in creating a network of scientifically trained winemakers, who have established a common ethos of scientific improvement and a sharing of knowledge on a 'science for all' basis, whilst also creating a strong social support network. Other important elements in the education process have been the efforts of the Wine Research Institute, the Australian Winemakers Forum, the Australian Society of Viticulture and Oenology, the Grape and Wine Research and Development Corporation, and state and Commonwealth agricultural departments to stimulate, support, and disseminate research findings and technical information in various ways. These have included local seminars, journal publication, the triennial Australian and New Zealand winemakers conference, and organised visits to overseas winemaking areas by small groups, to investigate the techniques being developed elsewhere. The combination of these activities has opened up the Australian wine industry to the advantages of new technologies and experimentation, standing in some contrast to the more traditional, inward-looking approaches which appeared to afflict some of the longer established

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winemaking areas in Europe during the 1960s and 1970s. Thus, technology transfer lies at the heart of the changes in Australian wine industry, a process which is supported by a variety of institutional mechanisms at national, state, and local levels. At the local level, winemakers' associations provide variable, but usually valuable, informal support, bringing producers together to discuss and act upon issues of common interest, from growing techniques, to marketing, and the quality of the local water supply. The most widespread form of formalised local regulatory support, however, has been for improved grape production, through the network of vine-improvement schemes. These are essentially a form of quasi-state social regulation, achieved largely through interfirm collaboration. Following the example of grape-growing areas elsewhere in the world, in the early 1970s it was decided that there was a need to improve the quality and distribution of planting materials available for grape growers (Cirami, 1984). Where previously cuttings had been taken in a relatively random way, the advance of clones displaying high yields and greater disease resistance increased the demand for improved planting stock. Similarly, there was a concern for accurate labelling of clonal materials. In response to this improved supply quality and growing demand, regional vine-improvement committees were established. These involved representatives of all interested parties and designated a number of source areas for each grape variety, each site chosen to give the maximum number of high-quality cuttings. The committee signs a contract with the grower to ensure management standards, but itself takes responsibility for the collection, allocation, distribution, and sale of cuttings. The first regional committees were established in South Australia in 1972-73, and by late 1983 382 source areas had already been designated, accounting for 95% of all vine cuttings in the state. In South Australia, there are six regional associations, which combined to create a state coordination committee in 1977 responsible for issues such as setting prices, specifications for cuttings, and liaising with the state Department of Agriculture. These regional organisations are but one formalised expression of complex local institutional support mechanisms, often operated in a highly diffused and sometimes near transparent manner, as we shall see later. Changing markets and corporate restructuring

The dynamic, iterative process of the changing market for Australian wines since the 1960s has already been briefly alluded to. The shift from bulk red wines produced largely for export, towards, first, bulk cask wines for domestic consumption, and more recently higher quality, more diverse bottled wines, was stimulated by a growing and more sophisticated domestic wine market, a changing regulatory framework which encouraged more grape varieties to be grown, and a local flexibility which allowed considerable experimentation with varietal wines. In addition, new technologies were rapidly adopted which produced advances such as better yielding grape stocks, better storage, utilising the latest refrigeration technologies, plus more sophisticated and more sparing use of fertilisers, pesticides, and additives. Both feeding into, and deriving from, these market changes was a pattern of major corporate restructuring. The extent of industry concentration has been growing in recent years: by the early 1990s just seven wineries controlled around 8 5 - 9 4 % of Australia's domestic market by value, 8 4 - 8 8 % by volume, following the merger of Thomas Hardy and Sons PTY Ltd, and Consolidated Co-operatives. The number of medium-sized producers has been reduced by takeovers, whilst a boom in small, specialised, often higher priced product wineries reliant on cellar door and local sales took place from the 1970s on. This resulted in a net growth of medium and small wineries from


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around eighty in 1970 (Hince, 1990) to around 700 by the early 1990s, but with a diminished share of the national market. The boom in small wineries was assisted by the liberalisation of licensing laws, which allowed cellar door sales to take off in a big way. This has been important because such sales are much more profitable for the winemaker than sales to wholesalers and other retailers. The wave of overseas purchases of wineries which marked the industry in the 1970s has not carried on at its expected pace, with some early purchasers selling on during the 1980s, such as Stanley's which was bought by Thomas Hardy from H J Heinz, and Lindemans, once owned by Philip Morris, now owned by the South Australian Brewing Company. Instead of assuming overall control, most overseas investors have in recent years tended to take a major stake in existing companies, such as the French company Pernod Ricard, which in early 1993 owned a one-third stake in Orlando, the third largest Australian wine company, and the Japanese company Suntory which had a 60% stake in Andrew Garrett Wines, a medium-sized company based in the McLaren Vale. Also tempting to a small number of overseas investors have been the vineyards, which at around A$40 000 per developed hectare come considerably cheaper than the A $ l million per hectare charged for a top Burgundian vineyard (Hince, 1990), attracting some of the major French champagne houses. In summary, corporate restructuring in the Australian wine industry in the postwar years has seen a shift from something approaching a cottage industry, which nonetheless relied heavily on bulk export sales, to a competitive consumer goods market. This restructuring process has been achieved largely through a massive concentration and centralisation of capital, which has seen the emergence of a small number of largely Australian-owned companies operating in global markets, paralleled by a small but influential segment of small companies serving largely regional and national markets. McLaren Vale case study Overview of winemaking in the McLaren Vale

The McLaren Vale area is one of the oldest winemaking areas in South Australia, and indeed in the whole of Australia. The first vineyards in the area were planted in 1838 near what is now the town of Reynella. The McLaren Vale from the start had the advantages of a warm temperate climate, with cool moist winters and warm dry summers, and where frost is rare. Vineyards and family wineries began to appear in small numbers almost immediately. As such, the McLaren Vale shared in the South Australian wine boom which lasted through to 1870, and in the slump in the 1870s, which emerged with market saturation, poor-quality wines, and interstate discriminatory tariffs (Ilbery, 1990). The next two decades saw a further boom, assisted by a greater attention to improving wine quality. However, it was the spread of the vine disease phylloxera in Victoria at the turn of the century which gave the area its opportunity for a more rapid expansion, along with the other grape-growing areas of South Australia. Helped by state government quarantine legislation, the establishment of a nursery of disease-resistant stock, and the establishment of the Phylloxera Board, South Australia was able to remain unaffected and to fill the market gap which the destruction of Victorian vineyards opened up. Australian federation in 1901 brought with it the elimination of most interstate trade barriers, which allowed many South Australian wine companies to expand still further as they began to focus on selling in the larger markets of New South Wales and Victoria, helped by South Australian government subsidies which reduced the costs of production (Ilbery, 1990). In the period up to the 1960s the McLaren Vale

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area, like many others in Australia, essentially produced cheap, bulk red table wines, much of it destined for the British market, relying on a fairly uniform style. In South Australia the main vehicle for this was the Emu Wine Company, which had a large winery in the McLaren Vale, now closed. For almost forty years (1924-61) this company was primarily responsible for the expanded production and stability of McLaren Vale winemakers. It would be misleading to describe the first sixty years of the century as conforming to a Fordist model, although certainly the export trade was greatly assisted by a range of government schemes designed to boost the export of mass-productionstyle wines. More tellingly the industry might be described as essentially colonial, where domestic tastes still reflected the tastes of the British, with wine not highly regarded as a commodity generally, and, where it was, with a distinct preference from the middle and upper classes for imported European wines. The British government also provided financial incentives, not least in 1925 when it decided to allow Empire wine a 50% preference over wine from other countries, halving the liabilities for customs duties. Changes in attitudes to wine emerged gradually, not least with the influx of migrants after World War 2 to Australia from Italy and Greece, which brought about changes in both wine appreciation and styles. There are some clear similarities between the Australian colonial experience and Canada's 'permeable Fordism' (Jensen, 1989; 1990). Some sense of the mass-production side of this system, which still exists in some parts of the Australian wine industry, is conveyed in caustic fashion by Simon (1985): "But there are other Empire wines which I call 'machine-made' wines; wine made from every kind of grape grown by the many known tea addicts, members of syndicates or associations of winemakers who never drink wine. They are wines which are handled in huge quantities, scientifically and economically, but not lovingly; wines which are blended, loaded, brought up to a certain standard of colour, strength and sweetness." There is some possible confusion about the geographical boundaries for the McLaren Vale area. The widest definition of the McLaren Vale district would encompass the Reynella area to the north and the Langhorne Creek area to the southwest, in addition to the cluster of wineries around the township of McLaren Vale. This area is also often referred to as the Southern Vales. To the south of Adelaide, near Reynella, the number of vineyards and wineries is continually decreasing, as suburban housing encroaches further into the periurban agricultural areas. Alternatively, in other parts of the Southern Vales area the numbers of wineries and the amount of land devoted to vineyards have both increased since the 1960s. The statistical reports of the Winemakers Federation categorise the Southern Vales area together with Adelaide and its immediate environs, including the small Adelaide Hills district. Together this region in 1983-84 crushed 16954 tonnes of grapes for wine production, more than doubling by 1989-90 to a crush of 35 378 tonnes. Over the same period the area's contribution to the South Australian total rose from 5.9% to 11.3%, with the state processing 53.7% of the national total in 1989-90. The area's grape crush then has been expanding both in absolute and in relative terms through the 1980s. This appears to be part of a long-standing trend, with Browett (1985) noting that the number of wineries in the Southern Vales alone increased from fourteen in 1961 to forty-three by 1984. The best estimate for 1991 suggests around forty-nine wineries were active in the area. It is difficult to be sure of this total as this excludes two self-proclaimed wineries which, although they may grow grapes, no longer make wine on site and are essentially sales outlets only.


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Adding to the confusion, small wineries in particular are opening, closing, and changing hands relatively frequently in the area. The growth of wine labels has further clouded the picture, following the emerging tendency for wine to be made by entrepreneurs who own neither winery or vineyard, arranging a production contract at a winery, using purchased grapes. This is very much a flexible-specialisation-style practice, as entrepreneurs operate close to the market but with minimum capital commitment themselves. Looking forward in time, the 1988 price rises led to a major leap in grape planting, with the chair of the local grape growers association noting, in an interview for this study, a 20% increase in area of grape planting in the three years to 1991. Because of the greater productivity of the new plantings this was expected to increase the grape crop by 30% by the mid-1990s. For the purposes of this study the McLaren Vale is narrowly defined as a distinctive cluster of thirty-one active wineries within a 5 km radius of McLaren Vale township. As a case study location, the McLaren Vale has the distinguishing features of being a traditional winemaking area, one which has transformed itself from essentially bulk supply to the UK market up to the 1960s, since when it has witnessed a mushrooming of small winery openings. Unlike the Barossa Valley area to the north of Adelaide or the Coonawarra to the southeast, the area is not dominated by the large wine companies, but rather by a mix of small, boutique wineries and medium-sized companies. Where the Adelaide vineyards have now largely been absorbed by urban expansion and the Adelaide Hills area is marked by a relatively sparse scattering of wineries, the McLaren Vale has a strong geographical concentration of grape growing and winemaking, potentially making it more amenable to some forms of flexible and collaborative interfirm working practices which reflect an evolved, evolving, or possibly fragmenting 'industrial district'. Certainly one of the most intriguing features of the McLaren Vale area is the complex blend of rivalry and information sharing between winemakers on production issues. This is by no means unique to the district, with interfirm collaboration in the production process a distinguishing feature in both well-established and more recent viticultural districts within the state and elsewhere in the country. Collaboration also contributes to sustaining the growth of a regional identity and consciousness that extends to marketing promotion of products from a distinctive 'industrial space'. The relative transparency in sharing production-related information does not extend to financial matters, something which has bedevilled the industry for a long time, with the profit margins of winemakers and the production costs of independent grape growers remaining closely guarded secrets. Nevertheless, in the dissemination of information on new winemaking practices and innovations, collaboration between wine and grape producers has played an important role. How this process is articulated locally is a major focus here. It is important to note that a winery can incorporate three economic sectors on one site: raw materials production, wine manufacture, and retail sales. For the purposes of this study the primary interest is in the winemaking side of the industry, although some consideration is also made of independent grape growers. In undertaking this study an attempt was made to visit each of the thirty-one wineries identified as still being open in the McLaren Vale in 1991. A total of seventeen wineries participated in the study, with all but two of the medium and large-sized ones cooperating. Some of the others proved uncontactable for reasons as varied as being run by 'hobby farmers' on a part-time basis, to being overseas to update on practices elsewhere. The survey covered 54.8% of wineries in the area, accounting for an estimated 80% of local wine production. Interviews were also held during late 1991 with representatives of the local Wine Grape Council, the McLaren Vale

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Winemakers Association, and the Wine and Brandy Producers Association of South Australia. Establishing historical and corporate restructuring contexts has been assisted additionally by an earlier survey, backed up by a continuing monitoring of start-ups, deaths, mergers, and other aspects of corporate restructuring in the area (see Browett, 1985; 1986; 1989). Interfirm relationships Local collaborative practices in the McLaren Vale area can be tracked back to five or six pioneering enterprises in the 19th century, when the harsh practicalities of making a living in a new settlement area made mutual support necessary to survival, not least in the form of helping out in times of emergency and at harvest. As has already been noted, this type of networking is part of a widespread and longstanding agrarian tradition. The heir to one of the oldest wineries in the district when interviewed observed that "cooperation has been here from the start—and little has changed in that. It is now tradition. It is risk-hedging too; you help someone in an emergency, then they'll help you". Burden (1976, page 145) too notes the historical dimensions of local cooperation: "The wine-makers of the southern districts have always been noted for their spirit of good-natured unity. From the outset their attitude of mutual help carried them through a number of difficult times, and their generosity towards one another, whether verbally or practically, resulted in a sharing of ideas on cellar and wine management ... Over the years it has worked very satisfactorily, beginning with Dr Kelly who published his views in his two books, through to Thomas Hardy, who actively promoted the welfare of everyone connected with vines and wines, and culminating in the formation of the McLaren Vale Winemakers' Committee in 1968." The nature of local cooperative relationships has, however, changed over time, and extends beyond informal support practices to a range of commercial contract relations and formalised local support systems which more closely echo the findings of the literature on flexible specialisation rather than that on agrarian change. The reasons for these changes can be linked primarily to the changing structure of the local winemaking industry. A small number of companies dominated local production through to the 1950s and were able to network relatively readily with each other. From the 1920s these were largely linked in to producing for the Emu Wine Company, and to a lesser extent to Gilbeys and S Smith and Company. Emu took over S Smith and then pulled out of the export market in 1961. Some local wineries, such as Seaview Wines and Ryecroft Vineyards, were producing bottled, own-label wines prior to 1961, but the bulk of the McLaren Vale vintage went for export. The closure of Emu, S Smith, and the Penfolds winery at McLaren Vale, plus the loss of smaller crushes at Woodley and Hamilton in the Adelaide suburbs left grape growers with grapes that could not be disposed of. This led to the formation of the Southern Vales Co-operative Winery, involving around 185 grape growers, in February 1965, buying the former Penfolds winery (Burden, 1976). (The cooperative subsequently went into receivership in the late 1970s, plagued by quality problems as producers tended to use it as a dumping ground for low-quality grapes.) The decision by Emu to abandon the UK export market also caused problems for the family-owned wineries which had been supplying the company. In the face of such adversity a marketing company was formed in 1966 to bottle and market dry red wine under the district label of McLaren Vale. It is critically important to appreciate that where the colonial export system meant the large firms sheltered their smaller suppliers from close encounters with complex external markets, by the 1960s the majority of


winemakers were actively seeking to expand their own domestic and increasingly international market, and they did this both independently and cooperatively. Collaborative practices then have changed over time, in part in response to changing market conditions, in particular to the increased market exposure of smaller companies. The McLaren Vale Winemakers Association was formed in 1968, evolving from the first cooperative venture, helping to formalise, but not replace, some elements of the networking which had long characterised relations between local wineries. The association took on increasing importance with the growth in wineries from the early 1970s, in response to a boom in demand for red wine. In consequence the organisation grew from just fifteen subscription members in the late 1970s to thirtyfive in 1991. Its functions include marketing the region and its wines (including holding a local wine festival), helping with the vine-improvement scheme, setting up seminars for winemakers and providing a forum for discussing local issues, and making representations on matters of collective concern, such as water resources and the use of pesticides. Another central feature of the restructuring of the McLaren Vale district has been the way in which relations between grape growers and winemakers are organised, increasingly allowing specialisation across the supply chain, with various forms of contract or quasi-contract flexibility in evidence. Although some winemakers produce all their own grapes, a majority buy in some proportion of their grapes from independent local growers. Well over a third of all the vineyards in the McLaren Vale are owned by local wineries. This has not created a closed, local market, with between 50 and 75% of the McLaren Vale grape crop being transfered either intrastate, predominantly to the Barossa Valley, or interstate. The organisation of grape sales within the McLaren Vale itself incorporates a wide range of practices, some of which display classic elements of 'flexible specialisation' and strengthening supply-chain linkages within a fragmented production complex. Only three of the seventeen winemakers interviewed grew all their own grape requirements, with high reliance on internal supply often indicating a winery's origins as frustrated grape growers unable to sell their grapes in times of oversupply. Four firms bought in 90% or more of their grape needs. The general pattern of purchasing for those regularly dependent on buying-in has been to establish a series of semiformal relationships with independent grape growers. Typically these relationships might account for 75% of all purchases, with the remaining 25% allowing for annual price and demand fluctuations, and being bought on the spot market. Some winemakers alternatively bought only irregularly, often using local brokers. Over half the firms interviewed purchased the majority of their grapes on the basis of long-term relationships, with no written contracts, but an evolved basis of mutual trust. The nature of the contract and the nature of the relationship with the purchaser also tend to depend on what grape varieties a grower has and in what quantities. No winemaker admitted to a written contract for long-term grape purchasing, although one did have such a contract for selling some of its own crop and grape crush to a large winery outside the region. Just two firms bought their additional grape needs solely on the spot market, and in both cases their reliance was relatively low. In recent times increasing numbers of winemakers have become more closely involved with their long-term independent grape suppliers as part of their concern with quality, providing technical advice on watering, pesticide use, pruning, and so on, whilst continuing to insist on being consulted on issues such as when to harvest. This form of relationship appears to work well in both directions, providing purchasers with some control over quality and growers with greater awareness of purchaser needs.

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In many ways it provides a classic instance of the close consultation on quality and consistency issues along the supply chain which, as noted earlier, is associated with certain forms of flexible specialisation. Trust is clearly central to these quasi-formal arrangements and is something which can only be built up over time, a finding which coincides with the views of Harrison (1992) in particular. When one rapidly growing winemaker reneged on its agreements with growers in favour of cheaper spot-market grapes in the early 1990s, it faced the wrath both of grape growers and of other winemakers. After negotiations the firm was brought back in line with local practice. In another case, in the late 1980s, a rapidly expanding winemaker visited local vineyards offering prices for premium grapes way above prevailing market levels, leading to retaliatory action from one large established grape purchaser. The combined social and economic pressures which are mobilised in such extreme circumstances provide an important form of local regulatory control. Not formal, and barely discernible to the unknowing, the unwritten code is not to be transgressed lightly for short-term commercial gain for the few. These incidents were clearly still seen as an important issue in 1991, in particular causing a number of winemakers to decry attempts by their fellow winemakers to drive grape prices down, because this militated against profitable grape growing. A viable grape-growing sector, sufficiently well capitalised to invest in new grape plantings to meet changing market demands, was recognised in this way as a fundamental underpinning of a flexible wine industry. This ability to act individually and collectively with a supply-chain perspective is a vital ingredient of the success of the wine industry in the McLaren Vale. The pattern which emerges is one of flexibility being sought through an informal contracting mechanism, operationalised on a basis of purchaser advice and monitoring, plus mutual trust. Long-term grape-purchasing agreements provide an important element of reliability and consistency for winemakers in terms of both quantity and quality, whilst providing stability for independent grape growers. For a number of winemaking firms this has been important in allowing them to expand without diverting money into land purchases and grape planting, and to concentrate their expertise on winemaking. It has also allowed them flexibility in choosing the quality, quantity, and variety of grapes purchased. The flexible nature of agreements often leaves scope for some price adjustments to reflect changes in prevailing market prices, specifying only the quality and quantity of grapes to be purchased. Flexibility is also obtained through a variety of other localised specialist contract relations, most notably apparent in an increased reliance on contract labour gangs, bottling, crop spraying, mechanical pruning, and harvesting contractors. Here again the further penetration of the capitalist sector into agrarian production systems has forced changes in previous social relations, where the capital demands of new productivity-raising equipment such as harvesters assume greater importance than the savings associated with noncommodified family labour. Over half the wineries interviewed relied on contract harvesting, and around one third relied on contractors for pruning. On a less widespread scale, a similar pattern can be identified for winemakers' grape-crushing and storage facilities. A notable variant is a small team of bottle labellers shared by some wineries. These forms of specialisation have increased largely as a result of the emergence of labour-saving technologies, which have simultaneously reduced the need for a high all-year-round labour force, reduced seasonal peaks of labour demand and increased capital investment requirements. In order to gain the advantages of reduced labour costs whilst avoiding high capital costs for machinery which is likely to be used for a limited time, grape growers have tended to rely on specialised contractors, or to hire out their own


equipment. The proximity to a range of other producers also means that it is relatively easy to get cheap secondhand equipment, a particular boon for small firms starting up. A further variant on this theme in the McLaren Vale involves chemical analysis of grape crushes and wines. Informally, one of the larger firms in the locality undertakes one-off free analysis for the smaller wineries in the area. This assistance is simply attributed to custom and practice, the tradition of helping others in the industry. The advantages of being an integral part of the McLaren Vale winemaking community extend beyond these types of factors. Winemakers continually turn to each other for advice on their own wine, on its taste, on the use of preservatives, and so on. Burden (1976, page 145) noted this too, with winemakers working "on the 'open-house' system where almost anyone was welcome in cellars at any time and there were no secret formulae which must not be shared with others. All for one and one for all' could well have been their motto". This openness is something which has long characterised the McLaren Vale region and which is increasingly being recognised as an important element of the national success of the Australian wine industry (Rimmington, 1992). The sharing of knowledge is an important social and economic phenomenon, with mutual trust at its heart. In the McLaren Vale the critical point is that so many of the small wineries are owned by specialist winemakers, as opposed to being owned by professional investors or tax-minimisation operations. These owners have been responsible for many of the major changes in wine styles and winemaking techniques that have occurred in the McLaren Vale area over the past twenty-five years. In all of this it is important to note also the role of certain individuals in setting up new wineries and also some winemaking consultants. These have acted as exemplars in making the technology shift which has emerged. There is also, now, very little external ownership of wineries in the region, and this has contributed to cooperation in ways that absentee owners generally do not. It is common, for instance, for winemakers' children to serve part of their 'apprenticeship' with other firms, picking up hints, whilst passing on their own knowledge gained at college. That so many of the McLaren Vale wineries are family owned appears to be a significant influence on the levels of trust and cooperation, particularly where families are long-established in the area. The rural, agrarian tradition of cooperation noted by Lem (1988) is also important in explaining the receptivity and easy adaptation of McLaren Vale winemakers to collaborative practices which seem innovative or epoch-making to commentators on urban industrial sectors. Generally speaking, the relationships between small and large firms within the McLaren Vale are secondary in importance to the indirect links between external large companies and local small companies. The main reason for the low importance accorded to large local firms is that there is only one large, fully operational winery of note in the area. However, it is the large wineries based elsewhere which are generally regarded as the pioneers for the majority of technological and marketing innovations within the wine industry. This said, very few of the wineries spoken to regarded the large companies as a direct influence on their use of technological advances, although a handful acknowledged that, to use the words of one, "like the rest of the industry, we do travel on the coat tails of the big boys sometimes". The sharing of information between large and small companies is much more uneven and precarious than between the local community of winemakers. The large companies were seen as jealously guarding their secrets where they could. However, these secrets rarely lasted long, in part because winemakers tend to move jobs, sometimes deliberately being poached, or setting up their own wineries, passing on knowledge in the process. Also important is the winemakers' ethos of the value of

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science, which tends to lead them to swap notes with each other informally, in pursuit also of "the holy grail of the perfect wine", as one winemaker put it. The same person also noted that there was something in the nature of the product, when drunk in suitable quantities, which was conducive to openness and sharing! The sharing of advances in winemaking technique and technology is a multifaceted process, much in evidence amongst small and medium-sized companies within the McLaren Vale, illustrating some of the advantages and perhaps the disadvantages of agglomeration. The most commonly used sources of technological innovation cited by winemakers were the district network and overseas visits, with the former providing a more regular and systematic source of knowledge. Over 40% of firms noted a reliance on this type of information exchange, whereas a third of firms noted the continuing influence of Roseworthy College, reading industry journals, and of attending wine-industry and related exhibitions (for example, for refrigerated storage equipment), meetings, and shows. Also important were local seminars and government laboratories (28% of firms noted these influences). Only one firm relied on equipment manufacturers and just two cited either a head office or dominant partner or purchaser based outside the district as an influence. Six firms noted that they either relied on consultants or provided consultancy services themselves. The advantages of this were variously quoted as getting a fresh, independent insight, avoiding the self-delusion of a jaded or overfamiliar palate for in-house wines, and the expertise in areas such as soils analysis which could be more cost-effectively bought in. The rapid emergence of independent consultants in the past ten years has complemented the informal local networks. Collaboration between wineries in the McLaren Vale is evidently good in production terms, though less so in marketing. Strong collaborative relationships are in part attributable to the growing market, which has meant firms have been able to concentrate on quality and building a market. This said, competition has still been fierce, in the words of one winemaker "value for money is hugely important; as competition got fiercer quality got better", bearing out some of Porter's (1990) observations, also noted earlier, concerning the role of local competition in providing a spur to greater innovation. The 'science for all' elthos and the intoxicating nature of the product have already been noted as powerful influences on openness and sharing. One winemaker also pointed to the importance of differences between areas (soils, climate, etc) and vines (age, etc) which mean that any two winemakers will end up making different wines even with very similar inputs and techniques. For this reason winemakers do not pose the same threat to each other as firms in the clothing industry, for instance. In consequence winemakers can both share and compete without excessive fear over secrecy. Other overlapping elements which contribute to local cooperative practices are the number of family-owned wineries which have been in the same family for at least two generations; a number of small boutique wineries that have been owned by specialised winemakers for fifteen - twenty years; a benevolent major player (Thomas Hardy's) with a long association with the region, which was also family owned until 1992; and a number of wine labels owned by a new generation of winemakers who either cannot yet afford to set up a winery or who have chosen not to. The levels of intraregional trade and cooperation are evidently high, but they should not be taken as indicative of a self-sufficient region. The McLaren Vale is also heavily networked in with other wine districts in South Australia in particular, in terms of grape purchases, use of common contractors, and in sharing advances in technique and technologies. In some respects the McLaren Vale is possibly not the most well developed in its internal networks. The Barossa Valley having an


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equipment-share scheme between one small group of wineries, to avoid duplication in buying new machinery, and the Langhorne Creek grape growers are much better integrated and networked than their McLaren Vale counterparts. What the McLaren Vale does have, however, is a wide range of flexible agreements in production, some of which can trace their origins back to the 19th century, and some of which are more a response to contemporary local and global restructuring forces. Summary It is difficult to see the McLaren Vale wine industry as an archetypal example of post-Fordism, not least since the area displayed many of its current 'post-Fordist' traits prior to the birth of Henry Ford. It is, however, a good example of some of the principles of successful agglomeration which, as Walker (1988) has argued, may well be a transhistorical phenomenon. The area also illustrates well how a successful local mode of social regulation can have strong historical roots: it is not necessarily something which can always readily be mimicked from other 'successful' or 'pioneer' areas. This raises the question of whether long-standing collaborative practices are embedded most in particular sectors, not least in agriculture and related industries, and indeed whether they are also most associated with rural and small town areas with their elaborate social networks. If so, attempts to create 'new industrial spaces' may well require more than getting firms to network better, however that might work, or setting up shared marketing centres. Empirically, studies of grape-purchasing arrangements and of the dissemination of technological advances are especially revealing of how the combination of formal and informal, national and local, state and nonstate forms of social regulation equipped winemakers in diverse ways for improving their strengths in national and international competition. The study illustrates something of how these different levels of regulatory activity have evolved over time and, to take up an earlier theme, seemingly adopted in a flexible manner. Relatedly, in a contemporary context the study reveals how formal support mechanisms are paralleled by a series of less formal regulatory and collaborative mechanisms. These findings lead to a challenging of the necessary uniqueness of particular traits of an accumulation regime, or indeed mode of social regulation, providing an important antidote to analyses which overemphasise the sudden 'emergence' of flexible practices and interfirm collaboration, where key ingredients can be readily identified and cloned successfully in other areas and other sectors. The analysis also emphasises that national regulatory systems for technological innovation and quality assurance can only be viewed meaningfully as part of a more complex system of support, where the local system of regulatory activity both mediates the national support system and adds various tiers of its own. This local milieu emerges from a combination of traditional practice, local cultural factors, local responses to national industrial restructuring processes, and the local working through of changes in national and international regulatory mechanisms. This leads to important issues concerning the extent to which local regulatory activities simply reflect or support national modes of regulation, and the extent to which local regulation activities cumulatively impact upon the national level. There is an interesting issue too of to what extent the practices of the McLaren Vale represent 'an idea whose time has come' as distinct from a purposeful change in local behaviour. The reality appears to be that collaborative practices evolved gradually over time, reflecting a particular history of local social dynamics and structures, whilst responding to restructuring processes at a broader level, as markets changed, large companies restructured, new technologies emerged, and exemplary practices evolved elsewhere.

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Acknowledgements. Flinders University of South Australia provided valuable support for Graham Haughton during 1991, when this research was undertaken. Comments on an earlier draft of this paper were made by two referees of this journal, and also by Adam Tickell (University of Leeds) and Steve Howlett (Leeds Metropolitan University). The usual disclaimers apply. References Aglietta M, 1979 A Theory of Capitalist Regulation: The US Experience (New Left Books, London) Amin A, Robins K, 1990, "The re-emergence of regional economies? The mythical geography of flexible accumulation" Environment and Planning D: Society and Space 8

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Porter M, 1990 The Competitive Advantage of Nations (Macmillan, London) Rimmington J, 1992, "Rimmington's word" Australia and New Zealand Wine Industry Journal 7(3) 123 Sayer A, 1989, "Postfordism in question" International Journal of Urban and Regional Research 13 666-695 Schoenberger E, 1989, "Thinking about flexibility: a response to Gertler" Transactions of the Institute of British Geographers: New Series 14 98-108 Scott A, 1988, "Flexible production systems and regional development: the rise of new industrial spaces in North America and Western Europe" International Journal of Urban and Regional Research 12 171-185 Sengenberger W, Pyke F, 1991, "Small firm industrial districts and local economic regeneration" Labour and Society 16 1-24 Simon A, 1985, "Wines and wineries of South Australia", in The Great Australian Wine Book Compiler RMayne (Reed Books, Sydney) pp 138-197 Storper M, Scott A, 1990, "Work organisation and local labour markets in an era of flexible production" International Labour Review 129 573-591 Thrift N J, 1989, "Editorial: New times and spaces? The perils of transition models" Environment and PlanningD: Society and Space 7 127-129 Tickell A, Peck J, 1992, "Accumulation, regulation and the geographies of post-Fordism: missing links in regulationist research" Progress in Human Geography 14 190-218 Walker R, 1988, "The geographical organization of production-systems" Environment and Planning D: Society and Space 6 377-408