40 Port anD the Douro
became his epitaph: ‘I know quite well what I want and where I am going.’ Salazar was given
complete control of the country’s purse strings and, by pruning expenditure and raising
taxes, he accomplished what had been previously thought to be impossible and balanced the
nation’s books. This put him in an extremely strong position and in 1932 he became Prime
Minister, a post that he held on to as virtual dictator for thirty-six years.
Due to Salazar’s combined financial prowess and increasing isolationism, Portugal
survived the world slump of 1929 to 1931 almost unscathed. The same, however, could
not be said of the Port trade, which had been steadily losing out to the 1920s fashion
for cocktails and Sherry as well as facing competition from the so-called ‘Brandy Wines’
of the British Empire. Prices fell and a number of firms encountered serious financial
difficulties although, as always, the growers were hit hardest. With the notable exception
of Quinta do Noval, nearly all the major shippers passed over the outstanding 1931
vintage, which is almost certainly the finest year in the twentieth century never to be
widely declared (see page 194).
Although by no means autocratic in temperament, Salazar behaved like a neo-
Pombaline saviour of the Douro. In 1933 (the same year as the constitution of his Estado
Novo or ‘New State’ came into force) Salazar created the three corporate organisations
which survive more or less intact to this day. Based in Oporto, the Instituto do Vinho
do Porto (IVP) was to be the senior body with responsibility for the general supervision
and administration of the industry but also maintaining a particular interest in the day-
to-day business of the Gaia entreposto. The Casa do Douro was set up as a secondary
authority to monitor and supervise the 30,000 growers within the Port demarcation.
Housed in a gloomy building that looks remarkably like a 1930s cinema on the main
street in Régua, the Casa do Douro continued to operate with impunity even when it was
severely compromised by a questionable business deal in 1990 (see page 49) In order to
balance the equation, all Port shippers had to belong to the Grémio dos Exportadores do
Vinho do Porto or Exporters’ Guild to which the IVP granted the Certificates of Origin
that accompanied shipments abroad. However, in order to be registered as a shipper
(i.e. exporter), two onerous conditions had to be fulfilled. Firstly, the company had to
maintain a stock of at least 150,000 litres (just under 275 pipes) and, secondly, it had
to be in possession of a lodge in the Gaia entreposto capable of holding an amount in
excess of this quantity of wine. With the exception of one or two flagrant abuses in recent
years, Salazar’s tripartite arrangement, which later produced the annual benefício system
(explained in Chapter 2), has served the industry reasonably well for over eighty years.
Back in the 1930s, when over-production had become a serious problem, the Casa do
Douro’s power to buy up excess stocks of wine from growers certainly helped to bring
supply back in line with demand. Prospects for the Port trade improved in the mid-
1930s, helped by the lifting of Prohibition in the United States and a growing market
for inexpensive tawny in France – however, nearly 50 per cent of all Port produced still
went to the United Kingdom. Some of this was re-exported, for Ernest Cockburn records
that on one occasion in 1934, 20,000 cases of Port were sent to the United States by one
firm just two and a half days after the wine had arrived in cask from Oporto. In the last
of many anecdotal entries in his book Port Wine and Oporto, Cockburn records how at