Wine has been made in the Douro since Roman times, although it was not until 1756 that the limits of the wine-growing region were legally established by the Marquês de Pombal, making it the world’s oldest demarcated wine region. It covers 250,000 hectares, of which almost 40,000 are under vine, cultivated by some 33,000 farmers. Annual production is around 250,000 to 300,000 pipes (of 550 L) of wine.

Traditionally this area has been divided into three sub-regions: from west to east, the Baixo Corgo, Cima Corgo and Douro Superior. The latter is the hottest and driest of the three, and although production is much lower it has always been associated with the best quality, most concentrated fruit.

All vineyards are attributed a letter by the IVDP indicative of the potential quality of the fruit according to a method developed by Álvaro Moreira da Fonseca in 1948. This classification, from A to F with A being assigned to the finest vineyards, is calculated using a complex points system which takes into account a vast number of parameters grouped under the three main headings of soil, climate and cultural practices.

This classification does not appear on the wine label but forms the basis of the benefício, the system used by the IVDP to control Port production.

Every year the IVDP declares how much Port can be made, basing its calculation on predicted quality and current stock levels. The remaining grapes can be used to make unfortified wine. The benefício is divided between the approved vineyards so that every grade of vineyard has the right to sell some grapes for port production, with the better vineyards getting a larger allocation. This system of control avoids gluts and ensures that the price of grapes for Port production is, in effect, artificially sustained by introducing scarcity. It also ensures that the 33,000 growers can make a living in a region where there is virtually no alternative agriculture or other form of employment.

Producers who own higher grade vineyards may not be able to use all their grapes for Port production due to the limited beneficio given to each specific vineyard and so they may buy grapes with benefício from growers with lower rated vineyards in order to maximise the use of their own higher quality grapes. Of course the incentive is always to transfer beneficio from lower grade to higher grade grapes, and so the ‘market’ although unofficial, does encourage the transfer to premium grapes in order to make economic sense. Some producers object that the beneficio system has effectively become a farming and social subsidy and have called for its modernisation or abolition but to remove it could make many thousands unemployed in a rural economy with very few other job opportunities.