Buzz-Saw Economics, Part 2: Wine on My Mind

Brian Hicks

Updated March 28, 2007

As I headed out to the suburbs of Santiago last Tuesday to visit the world’s first winery to list on the New York Stock Exchange, I expected to have a day of snooty sophistication. Don’t get me wrong, I like a good cheeseburger and Dr. Pepper as much as anything stateside. In fact, I grew very fond of Chile’s street vendors and their guacamole-smothered sliced steak sandwiches and hot dogs.

Yet along my ride on public buses out to the Concha y Toro winery, I got an interesting look at the "other Santiago." Just that morning, I had been sitting in the Chilean headquarters of the Dutch international bank ABN-Amro, talking bonds and debt with Sergio Faivovich, head of the bank’s local Credit Portfolio Management division.

"We tend to live in bubbles," Sergio told me. In Baltimore, where I live, bubbles pop quickly. Blighted rowhomes circle fancy neighborhoods, meaning that the class differences are as startling as the crackheads who sometimes jump at you from around a corner.

Many cities are different, especially outside the United States. In my country, suburbs are where families escape the chaos of inner cities, even the ones that nurtured them and whose sports teams and general metropolitan identities they cling to. In Santiago, Sao Paulo, Prague, and Beijing, the city center is where you want to be. The hills and boondocks are for the towerblock public housing and shabbily-built homes of shanty towns.

Santiago’s suburbs are somewhere in between.

I passed loud outdoor markets, with people hawking everything from food to footwear. I also saw shopping malls and home improvement stores.

The informal economy is vibrant, with signs on many small houses advertising haircutting or tailoring services just beyond the front garden. Carefully planned spray-paint murals bearing social slogans cover concrete walls that separate homes from the sidewalk, recalling many American inner cities.

I am very glad that I saw this aspect of Chile’s capital city and financial center.

But in terms of sampling local fare, my goal for the day was as clear as chardonnay.

Concha y Toro vines with Andean peak in background

Concha y Toro is one of the country’s oldest continuously-run wineries. Established in 1883 by a well-to-do Chilean lawyer and landowner, the estate in the Maipo River Valley sits on a hillside just outside the valley metropolis of Santiago.

By 1933, despite the dire straits in which many businessmen and investors found themselves during the Great Depression (whose effects spread worldwide), Viña Concha y Toro was able to go public on the Santiago Stock Exchange.

Throughout decades of expansion, sophisticated enhancements to product and production standards, and sound business practices, Concha y Toro maintained its upward trajectory.

close-up of ripe grapes on the vine

In 1994, Concha y Toro listed on the NYSE under the symbol VCO.

Unfortunately for this volume of Buzz-Saw Economics I couldn’t take a snapshot of the full-bodied flavors and unique smells of the underground cellars where Don Melchor, the premier Concha y Toro offering named for the company’s founder, is aged.

The bricks in this cellar were laid using a unique mixture of mud and eggwhites, giving the underground aging room a distinct aroma. Though dark and damp, the structure is so solidly built that no renovations aside from lighting modifications have been made since it was constructed. This is the place where Don Melchor is finely aged, and I am very pleased to tell you that my taste buds can now attest to the results.

this cellar is over 100 years old and barely changed!



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