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1 Clusters of Grapes and Wine

This article considers application of a clusters approach to the California wine industry. After examining the idea of clusters in the context of industrial-complex economics, agglomeration economics and social network economics, we assess the usefulness of a cluster to consider the competitiveness of the California wine industry for national and global sales, export development and vineyard prices. We find that geographic clustering of grape production, winemaking and allied industries derives mainly from obvious economics of grape production and transport costs. If the cluster concept is to be useful empirically, California likely should be viewed as comprising several geographic wine clusters.