Constructed in 1790 by the British Port wine shippers, the building served as a gentleman's club and meeting place for the trade organization known as the British Association.<ref name="Johnson pg 326">H. Johnson Vintage: The Story of Wine pg 326 Simon and Schuster 1989 ISBN 0-671-68702-6</ref> The original Factory House opened at another location in Oporto in 1727. Conceived as a meeting place for British shippers to discuss business, the house became a private club for the British where they colluded to consolidate their monopoly over the Port wine industry. Eventually the Factory House moved to the Rua Nova dos Ingleses (The New Street of the English) by the Oporto docks. In 1806, the Portuguese government granted the land upon which the Factory House is built to the British consulate in perpetuity "....from this day and forever."<ref name="Oxford pg 264">J. Robinson (ed) "The Oxford Companion to Wine" Third Edition pg 264 Oxford University Press 2006 ISBN 0-19-860990-6</ref> The Factory House building is still open today and still serves as a meeting house for British Port shippers though the street has changed it name to now Rua do Infante Dom Henrique.<ref name="Enter">Enter Portugal "The Origins of the Port Wine Trade" Accessed: December 19th, 2009</ref>
The first Factory House opened at another location in 1727. The purpose of the Factory House was to serve a meeting house for the foreign British merchants in the Portuguese city. Members of the Factory House became known as "Factors". With their frequent meetings, the British shippers were able collude together on pricing and strengthened their monopoly over the Port wine trade. All business was conducted in absolute secrecy from the Portuguese.
Over time the Factory House became a symbol of the British monopoly. Complaints about the business practices of the British shippers and eventually lead to the Portuguese Prime Minister Sebastião José de Carvalho e Melo, Marquis of Pombal establishing the Douro Wine Company in 1756 to bring more Portuguese influence and control to the Port wine industry. Among the Douro Wine Company's powers was the ability to set pricing for what the British shippers had to pay the Portuguese wine growers of the Douro. The monopoly of the British Factors was essentially over. The British passed on their increased costs by adding them to the price of their Port. In Oporto, the local tavern owners reacted angrily to the price increase which lead to the so-called Tipplers' Riots that broke out on February 23, 1757. Riots broke out across the city, prompting Pombal to send 3,000 soldiers to squelch the rioting. Believing the Factors were primarily responsible for the riots, Pombal dealt out harsh punishments. Both the British and their sympathizers faced large fines, the confiscation of property and jail time. Some were banished to Africa and India, while Pombal had 26 members of the Factory House executed.<ref name="Enter"/>
In 1790, the current building was constructed. During the Napoleonic Wars, the Factory House was temporarily closed when the French invaded Portugal in 1807. After the war, it was reopened on November 11, 1811, with a lavish dinner and ball.<ref name="Oxford pg 264"/> By 1814, the building turned into more of a private gentleman's club among the merchants. During the 19th century, the Factory House developed an air of exclusivity, holding formal balls for the British of Oporto and excluding most of the Portuguese shippers who worked in the wine industry. While sometimes Portuguese dignitaries and government officials were invited, until the end of the 20th century there was an official decree of the Factory House that excluded any Portuguese military officer below the rank of Field Officer from attending.<ref name="Johnson pg 326"/> Today, though membership is still officially limited to British-owned Port companies, there are now more Portuguese than British members of the Factory House due to the extensive integration of Portuguese workers into the corporate structure of many of the British Port shipping firms.<ref name="Oxford pg 264"/>
The Factory House features a pillared entrance hall leading to a monumental staircase. Among the many rooms of the house are a map room, drawing room, ballroom, dessert room, library and banquet hall.<ref name="Johnson pg 326"/> The house also features an Anglican church, a cricket and tennis club as well as the oldest British school found outside of the United Kingdom.<ref name="Oxford pg 264"/>
The Factory House host a weekly luncheon where members meet for lunch to discuss the wine industry and business. During these lunches the shippers share various Port wines from their collection, including one vintage Port that is tasted blind. Wagers are taken among the guests as to what vintage the wine is and from which shipper it comes, as a ritual game among the members.<ref name="Johnson pg 326"/>