The Panic of 1893
With the collapse of the national economy, grape and wine producers were on the verge of bankruptcy and most blamed the big city merchants with their monopolistic practices. According to the Economic History Association, “The National Bureau of Economic Research estimates that the economic contraction began in January 1893 and continued until June 1894. The economy then grew until December 1895, but it was then hit by a second recession that lasted until June 1897.”
California Wine Association (CWA) and California Wine Makers Corporation (CWMC) formed
According to the California Historical Society, holders of the California Wine Association (1894-1936) records, “The 1890s were a turning point for viticulture in California. The State’s wine industry was in a seemingly perilous position. California’s 200,000 acres of vineyard were overproductive, the country was in the middle of a depression, and California wines were sold cheaply without much regard to quality. In 1894, in an attempt to secure favorable options from grape growers and winemakers, and to raise prices and stimulate trade, seven leading wine firms joined together to form the California Wine Association. Their action, however, had an unintended consequence: winegrowers formed their own interest groups, which, in turn, led to the wine wars of the 1890s. In order to successfully negotiate grape and wine prices, the two factions came to agree upon standards for terms such as “hill grapes” and “valley grapes,” and stabilized the quality of California wine in the process. The C.W.A. would eventually control over eighty percent of wine manufactured in the State.”
The California Historical Society’s guide to the collection can be found on the Online Archive of California at http://www.oac.cdlib.org/findaid/ark:/13030/tf667nb130.
Ben Marks details the story of the rise and fall of the California Wine Association in his article The Forgotten Kingpins Who Conspired to Save California Wine for Collectors Weekly, “Founded in San Francisco in 1894, the C.W.A. was comprised of a number of highly influential “someones,” including the biggest and most successful wine merchants in the city, who had their hands in everything from the ownership of vineyards across the state to wineries and distributorships. By joining together to form the C.W.A., they were effectively colluding—in broad daylight—to create a wine cartel, despite the fact that the Sherman Antitrust Act had just passed in 1890. That’s how bad things were for California grape growers and wine merchants in 1894; the prospect of an antitrust lawsuit brought by the federal government was preferable to the status quo.”
Also in 1894 shorly after the formation of the CWA, growers and winery owners led by Italian Swiss Colony formed The California Wine Makers Corporation (CWMC) to protect their interests.
1897 to 1899
The Wine War
According to Charles L. Sullivan in his definitive book, A Companion to California Wine: An Encyclopedia of Wine and Winemaking from the Mission Period to the Present, “For two years the two organizations tried to work together but in 1897 open warfare over prices was declared. The press had a field day. The Wine War, particularly in the northern California press, competed for ink with the events in Cuba leading to the war with Spain. But in 1899 increased demand and rising prices encouraged the CWMC to go out of business and to sell its assets to the CWA. For decades the combatants traded war stories and reminisced. Actually the real scars and casualties of the Wine War were rather insignificant.”