NEWS & PRESS

IS CHILE’S TROUBLED PAST THE REASON ITS WINE’S FUTURE IS SO BRIGHT?

Chile’s geology and climate are perfect for making wine. With the ocean on one side and
the Andes on the other, Chile’s vineyards get the benefit of salty winds and cooling airs,
plus wide day-to-night fluctuations — perfect conditions for grape growing. And yet, up
until the mid-’80s, the wine produced in Chile was by all accounts pretty awful. It was
made by Chileans for Chileans, mostly from a grape called pais, or Mission, and barely any
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of it was exported. Chileans themselves were drinking less wine than ever, and by the
1980s, half of the vineyards had been uprooted. In 1985, the entire industry was valued at
a scant $11 million. But all that was about to change.
Around that time, a young winemaker named Aurelio Montes was working at a Chilean
winery called Viña Undurraga. But he yearned for more. “I felt that Chile deserved more
than what it was getting,” he told me recently in his home in Santiago. “I wanted to show
the world that there was the chance for good wines and I wanted to grow in life and give a
better life to my family.”
Aurelio Montes in his home in Santiago
I met Montes on a press trip to Chile. Tall and erect, with staggeringly blue eyes and a
warm smile, Montes is impossibly charismatic, one of those rare people who can captivate
a room full of people while also putting them at ease. Sitting on an enclosed patio in his
Santiago home, Montes told me how he eventually left Undurraga to start his own winery,
Viña Montes, with three partners (it was his winery that sponsored the trip).
Montes is now 70 and considered to be one of Chile’s most experienced and respected
winemakers, according to Wine Spectator. Today, Viña Montes produces 680,000 cases of
wine a year, with 92 percent of sales from export markets. Montes’s wines have won
awards, with scores in the 90s from the likes of Wine Spectator. But it’s not just Montes
who is producing fine Chilean wine. Along with a few others, Montes brought Chile into a
new winemaking era. In just three decades, Chile had transformed into a recognized
destination for fine wine. What’s more, as of 2010, Chile was exporting over 70 percent of
its wines – a higher percentage than any other country in the world. In 2013, Chile
exported almost 900,000 tons of wine. The industry is currently valued at $1.9 billion – in
no small part due to Montes’s vision.
“I always compare myself with a surfer,” Montes explained. He’s sitting on a surfboard
and sees a big wave coming — but no one else sees it. “And I jump to the table and I surf
the wave, all the way to the beach,” he says. “That’s more or less what happened. Everyone
else was looking somewhere else. I was looking at the wave.”
But though Chile’s flourishing wine industry is indebted to the vision of people like
Montes, this is not the only source of its splendor. In fact, Montes’s metaphor of being a
surfer is more apt than he may even realize. For in addition to his vision and his
willingness to take risks, there were social and political currents that enabled Montes to
succeed as he did. Indeed, that wave he rode had a name. And its name was Augusto
Pinochet.
Pinochet was the brutal Chilean dictator who ruled Chile for 17 years, from 1973 to 1990.
His reign included the torture and disappearance of dissidents and the silencing of
political opponents and the free press. But Pinochet’s reign had a curious side effect: The
dictator revealed himself to be committed to free-market principles, principles that would
prove crucial to Chile’s emerging wine industry.
In fact, the story of Chilean wine may embody one of the central ironies at the heart of
Chile’s recent past. Could it be that a dictator who opposed all forms of political freedom
and killed, tortured, and exiled his opposition, would end up implementing market
conditions for a flourishing wine industry? Was Pinochet good – even essential – for
Chilean wine?
*
The seeds of Chile’s wine revolution were planted back in 1970, when a majority of the
Chilean people voted for the socialist politician Salvador Allende as their president. Not
everyone was pleased with the new administration. Chile’s elites feared what a socialist
president might have in store for them. They were right to fear him, too; Allende
nationalized large industries like Chile’s copper industry and its banks. But even worse for
Chile’s elites was the land seizure and redistribution. Between Allende and his
predecessor, Eduardo Frei Montalva, the great estates of the landed property system were
expropriated from the Chilean elites, placing them in the hands of the state, explains
Antonio Bellisario, a professor in the Department of Earth & Atmospheric Sciences at
Metropolitan State University of Denver who has written about the subject.
The idea was to redistribute these assets among Chile’s working classes. But Allende’s
plans faltered, and by 1972, the Chilean economy was in free fall. Food shortages led to
people standing in line for bread, and in 1973, a military general named Augusto Pinochet
led the army in a successful military coup, or junta, against the Allende government.
Barricaded in the presidential palace, Allende ended up dead, most probably by his own
hand, and Pinochet installed himself as a military dictator.
Augusto Pinochet/Wikipedia
From the get-go, Pinochet’s new military dictatorship was a violent affair. Thousands
of people were killed; 30,000 people were tortured. Almost 4,000 people disappeared
without a trace. But the closing down of political freedoms came with a curious side effect,
thanks to an exchange program between the Catholic University of Chile and the
University of Chicago. The U of C’s economics department was famous for one of its
professors, Milton Friedman, who advocated small government and deregulated markets
as the path to economic prosperity. The Chilean students educated at the University of
Chicago came to be known as the “Chicago Boys,” and they brought Friedman’s
convictions back to Chile with them.
When Pinochet came to power, he didn’t have an economic platform, explains Professor
Javier Nuñez, an economist at Universidad de Chile. The Chicago Boys saw an
opportunity; using the principles they’d learned at school, they convinced the dictator to
reduce the size of the government and end restrictions on trade.
It took a while for these new policies to really bear fruit in the markets. First there had to
be a reshuffling of labor and capital between the public and private sectors, and then
between economic sectors, from protected sectors to natural resources, explains Professor
Nuñez. This took time. And there were a number of international recessions in the ’70s
and ’80s that hit Chile hard and resulted in high unemployment and a freefalling GDP.
But eventually, things settled down, and today, Chile has the strongest per capita GDP in
Latin America.
*
Not everyone sees things this way. Some, like Wendy Brown, a professor of political
science at UC Berkeley, disagree that the Pinochet government, even its economic aspect,
presents a net gain for Chile. Unemployment grew. There was a currency disaster that
plagued Chile through the ’80s and ’90s. “So if what people mean by, ‘It was good for the
economy’ is that it generated a higher rate of wealth production, yeah it did,” Brown says.
“Did it distribute it widely to the people? No. Did it produce stability? Absolutely not.
When it comes to economic measures, you get to choose the ones you use,” she went on.
“People who praise neoliberal rates of growth cannot defend the growing disparities
between the rich and the poor.”
As for the food lines under Allende’s administration, what came next was much, much
worse. “What followed was rounding up tens of thousands of human beings and shooting
them,” she says. “Take your pick.”
But most Chileans separate Pinochet as a dictator from the economic regime he
implemented, says Nuñez. Most Chileans acknowledge that Pinochet abused human
rights, killing, torturing, and exiling people; but at the same time, they insist that the
economic policies he implemented in terms of opening the economy were inevitable and
good for the country.
And some are not ambivalent at all. At Viña Montes’s Apalta winery, I spoke with some
women who were sorting grapes. One of them, a short woman with black eyes and a bright
smile, told me that she had worked on the property before it belonged to Montes when it
was just a farm. “I’m as part of this place as any of the bricks,” she told me through a
translator.
Viña Montes/Credit: Pamela Heiligenthal
She and the other workers I spoke to were all staunch Pinochet supporters. They felt safer
under the dictator’s rule. “Back in those days, you could walk down the street and no one
would try to hurt you or try to do you any harm,” she said. “Now it doesn’t feel quite like
that.”
I asked if she knew anyone who had been tortured, or exiled, or killed. She and the other
women laughed. “The truth is, no,” she told my translator. “But you can’t talk about it.
Because supposedly everything that happened during those times is bad. But it wasn’t bad
for us, here. It felt good, safe.”
And they didn’t miss the right to vote during that time, either. “We couldn’t vote, but
things are not as bad as they are usually told in history,” the woman explained.
Another person I spoke to, Daniel Greve, is a food and wine writer who runs a company
called Imporio Creativo. “I think Pinochet was maybe good for some things in an
economic way, very bad in other ways, the same as, you know, Allende,” he told me.
Greve is from Santiago, and his parents were pro-Pinochet. “Because they suffered a lot
with the Allende thing, no food, the queues,” he explained. But his neighborhood, like
much of Chile, was very mixed. Greve remembers conversations between his parents and
their friends where they would debate the pros and cons of Pinochet’s regime.
One winemaker I spoke to seemed to symbolize the tension at the heart of Chilean society.
His family had benefited from the junta because his father’s business had been
nationalized by Allende. But his wife had the opposite story: Her three uncles had been
diplomats in Allende’s government and had been exiled to Australia.
Pinochet’s reign ended in a referendum in 1988, in which 55 percent of the population
voted him out, meaning that 44 percent wanted him to stay. But the only person I met in
Chile who unapologetically reviled Pinochet worked at the Pablo Neruda Museum.
Neruda, Chile’s most celebrated poet and Nobel Prize winner, was also a big Allende
supporter. He died just days after the coup, possibly at the order of Pinochet.
The young man working behind the counter at the gift shop had an uncle who had been
disappeared by Pinochet and who was still missing. When I asked him about the positive
effects of Pinochet’s economic policies, he said, “They say the same thing about Hitler.”
*
It’s not surprising that the people I met during my trip – wine industry people – were
Pinochet apologists. Perhaps no industry was as affected by his economic transformations
as the wine industry. Under Pinochet, tariffs on international import and export were
reduced. Pinochet ended laws against foreign investment. Steel tanks were introduced to
Chilean winemaking for the first time, explains Bill Crowley, Professor Emeritus at the
Department of Geography and Global Studies at Sonoma State University. “They had
more or less had great difficulty importing new winery technology until after Pinochet’s
coup and his new pronouncements,” explains Crowley.
Pinochet recognized Chile’s geography as a huge competitive advantage, and under his
rule, agriculture increased, as did fishing, forestry, and, especially, wine.
But Pinochet wasn’t the only one to recognize the favorable conditions. A lot of
entrepreneurs saw the possibilities for producing good wine in the Chilean climate, with
its dry summers, its wet winters, and the moderating effects of the Andes mountains.
“They saw the potential and went for it and it worked,” Crowley says.
Viña Montes/Credit: Pamela Heiligenthal
It wasn’t only Pinochet’s policies, says Bellissario. Remember that land that Allende had
seized from the landed elites? It now belonged to the government. When Pinochet took
power, he gave a third of the land back to the landowners, and redistributed the rest
among the peasants. But without the requisite tools, they couldn’t manage their own
properties. It became a Darwinian system where most of the peasants were forced to sell
the land, dirt cheap, to bidders of the government’s choosing. Suddenly there was cheap
Chilean land available for sale to foreign investors or upper middle-class business people.
“They auctioned them off and created a new class of entrepreneurs,” says Bellisario. “They
sold it back only to landowners who wanted to use the land for capitalist economic
purposes.” Like winemaking.
*
Aurelio Montes’s story runs parallel to Chile’s larger wine story in more ways than one.
Born in 1948, he came from modest beginnings, the youngest of four children. His father
worked in insurance. “We had enough for a decent life, good schools, a car, and that was
about it,” he told me. “So we were not rich at all. There was nothing missing but nothing in
surplus at home. We had what we needed.”
Montes had just left university when Allende assumed power. He was 21 years old, and
eager to start working and build a career for himself. But he felt stymied by the economic
conditions he found around him. “It was a real mess,” he remembered. “I was in charge of
the unions in the company that I worked. And after 2 p.m., I couldn’t talk to them — they
were all drunk.”
Montes feels strongly that Allende took Chile in the wrong direction. “He was the worst
government in Chilean history,” he said. “We didn’t have food. We had to make a queue to
buy bread.”
Things got worse. Montes’s wife’s family owned a farm and some land, and it was
expropriated and nationalized. Lots of his peers left the country, but Montes never even
considered it. “I told my wife, we will stay here, we will fight for Chile, we will be part of
what’s going on here,” he said.
Montes got his job at Undurraga right after he left university, and worked there up until
the ’80s. But after 12 years, he grew dissatisfied with his prospects. “I reached a ceiling,
because I was not an Undurraga,” Montes told me. “I got to the highest level I could
without being a member of the family.”
A friend, Alfredo Vidaurre, convinced Montes to leave Undurraga. Vidaurre was an
economist working with a Chilean banking group that had recently purchased a winery,
and he wanted Montes’s expertise at the helm. But instead, along with Pedro Grand and
Douglas Murray, Montes and Vidaurre founded their own winery, Discover Wines, in
1988, changing the name soon thereafter to Viña Montes.
With his 16 years as a winemaker behind him, Montes knew exactly where to get the best
grapes in Chile. With a $62,000 investment from Vidaurre, they started to buy tiny
amounts of grapes and borrow space in other wineries to make wine. It was tough going at
first. “We didn’t have a penny in our pockets,” Montes told me. He had five children, and
no steady income; it was a scary time. But Montes’s vision was a powerful one, and today,
Viña Montes has 700 hectares under vine in Colchagua and Zapallar.
Some of the Montes wines/Credit: Pamela Heiligenthal
But Vidaurre, who died in 2008, was not only seizing opportunities offered by the policies
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of the Chicago Boys. Vidaurre was one of them. After college, he won a Rockefeller
Foundation scholarship to the University of Chicago, to study economics. Vidaurre
returned to the Catholic University to fulfill the terms of his fellowship, and became the
youngest ever Dean of the Faculty of Business Administration and Management.
This was still during the Allende years. “Chile cannot have been the easiest of
environments in which to teach business after the election in 1970 of the Marxist
President Allende,” writes Jamie Ross in Where Angels Tread: The Story of Viña Montes.
“It was not so much socialism, as all-out class war,” Vidaurre told Ross. Vidaurre left Chile
just weeks before the junta, and returned four years into Pinochet’s regime to join the
banking group BHC as head of investments. About a decade later, he and Montes went
into business together.
It’s inarguable that the Pinochet years resulted in better wine for Chile and for those of us
who love great, affordable wines. If there had been no military dictatorship in Chile, there
would be no Chilean wine industry as we know it – about that all the economists I spoke
to agreed. But it took the vision and innovation of winemakers like Montes to turn those
opportunities into gorgeous wines like Montes’s celebrated Purple Angel Carménère, or
the Montes Folly Syrah.
Montes himself has complicated feelings about Pinochet. “No one likes a dictatorship,” he
told me in his home in Santiago. “But if I were to say something positive – there’s not too
much of it — but if there’s something positive, it’s that we had to work hard to make a
better country.” And now, Chile has the best economy in South America, he went on. “And
it started with Pinochet.”
Published: August 2, 2017
” Chile, History, Longform, Politics, South America, Wine


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