King Alphonso, Charles II and Peter Mandelson | Breakthrough Funding

Sunday, June 7, 2015

King Alphonso, Charles II and Peter Mandelson

Part One 1143 - King Alphonso Henrique of Portugal. The Kingdom of Portugal was established in 1143 and even back then, wine was an important export. 

The Romans had been in the area for 500 years beforehand, and thoughtfully left a legacy of vine growing and wine making along the banks of the Douro River - it’s still produced there today.

On their way to the Holy Land (for some 'crusading' against Muslims) the English stopped by to help the Portuguese King Alphonso Henrique, during the siege of Lisbon in 1147. They probably saw it as some useful combat training before they got to Jerusalem, but Alphonso was extremely grateful. Ever since then we have pretty much remained firm friends with the Portuguese, despite Christiano Ronaldo.

In 1386 the Treaty of Windsor established a formal political, military and commercial alliance between the two countries. The treaty gave British merchants the right to live in Portugal and trade on equal terms with Portuguese people, and vice versa. Strong and active trading links developed between the two countries. Many English merchants settled in Portuguese towns and cities - better weather out there, after all.

By the second half of the 15th century a significant amount of Portuguese wine was being exported to England, often in exchange for salt cod, almost a staple diet in Portugal. What a bargain. Even so, it was French Bordeaux wine that remained more popular. Due to its closer proximity it was easier and cheaper to ship to Blighty. It was also considered 'fuller' than the Portuguese equivalent, which was regarded as thin, harsh and unstable in transit.

Part Two 1667 - Charles II of England. In 1667, a minister of Louis XIV, embarked on a series of measures to restrict the import of English goods into France. The French and English had fallen out again, and both sides were aiming to hurt each other’s young men, each other’s pride or each other’s pockets, as much as possible. Nothing’s changed.

In revenge Charles II banned the importing of French wine altogether, obliging the English wine trade to seek alternative sources of supply. The merchants in Portugal who’d been trading a range of goods until then, spotted this opportunity and rapidly concentrated their efforts on significantly expanding wine production and export efforts to Britain.

From Oporto, ships would be bound for England stuffed with Portuguese Vinho do Porto and not much else. The sea journey out of Oporto into the Atlantic could be treacherous, and in bad weather the wine could deteriorate. The worst nightmare would be to survive the journey only to have to tip all the contents in the Thames when you got there. It’s said that for this reason a small amount of grape spirit, or brandy was added, which increased its strength and stopped it from spoiling. Others claim this was done to make Portuguese wine less characteristically thin and more like Bordeaux, catering for the sweeter palate of the Brits and allowing for higher pricing all in one hit. Whatever. The process of adding brandy to the wine during fermentation is now of course, an essential part of the making of Port.

Part Three 2000-2001 – The Lord Mandelson. During the Blair Government, the Treasury and Peter Mandelson, the then Secretary of State for Trade and Industry, issued a joint Consultation Document called “Innovating for the Future: Investing in R&D”. It was set up to investigate options to address barriers preventing UK businesses from innovating and exploiting their ideas in the market.

Based on the responses given, the Government launched the R&D tax credit scheme in 2000. It's now “the biggest single funding mechanism for business R&D provided by the Government”. There are similar schemes across Europe, Australia and Canada too.

What has this to do with Port and Bordeaux? Typically, business innovation is the result of external events or situations, and the ability of an entrepreneur to see these as opportunities. They’ll work out how they can create or modify products or services to take advantage of transformations in the macro environment. It’s something we’re so good at in the UK – we’re innovative and rebellious in equal measure – important qualities in an entrepreneur.

Changing the way a product is made, altering its chemical make-up or devising new materials or transportation methods, could all qualify for this ‘cash for innovation’ scheme. The government is actively encouraging innovative small businesses to apply and receive these cash payments. It’s a great source of funding because you don’t need to give away equity or take out a loan, it’s simply money you’re due.

If you want to find out more visit www.breakthroughfunding.com or give us a ring on 0800 772 0800 and we’ll help you get this money into your bank account.

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