The main constraint facing the Cape wine industry at the turn of the twentieth century was the overproduction of cheap wine from inferior cultivars. In the context of an official commitment to promoting 'good wine', this chapter examines the fate of innovation in the vineyard, the cellar and the marketplace. It argues that innovation in one domain often delivered short-term gains that were checked by the lack of transformation elsewhere. It identifies four key periods of innovation before the mid-1990s: the 1930s when serious attempts to replant vineyards and develop an export market were undermined by the KWV; the 1950s when the discovery of cool fermentation permitted a breakthrough in quality for white wines but drove small producers into the arms of cooperatives that became a barrier to further innovation; the 1960s when, in the context of the de-racialization of the liquor laws, merchant-manufacturers pioneered new brands but failed to conquer the Black market; and the 1970s when independent producers sought to bottle their own (largely red) wine but were constrained by the KWV system of regulation. The KWV protected the small producer and rewarded quantity over quality, largely for political reasons. In the 1980s, overproduction, the smuggling of planting material and the dumping of cheap wine signalled a crisis in the industry that was only resolved following deregulation.