The Role of Middlemen in the International Coffee Trade since 1870: The Dutch Case

Hugo van Driel

Business History, 2003, vol. 45, issue 2, 77-101

Abstract: The tendency to cut out middlemen (disintermediation) is a common theme in the literature. This article focuses on the functions performed by middlemen for buyers and sellers. If there are large gaps between the conditions of supply and demand, uncertainty for buyers and sellers is relatively high. Middlemen are particularly suited to reduce this uncertainty by bridging the gaps. Four dimensions are distinguished: place, time, quantity, and quality. Except place, the gaps on these dimensions have tended to close since the latter part of the nineteenth century. The relevance of the multi-dimensional framework for explaining the fate of the middlemen in this period was investigated by a study of the Dutch coffee traders. The conclusion is that bridging the gaps on the dimension of quantity was the crucial function: first and foremost, the coffee traders were cut out when they were no longer needed for reaching 'contactual efficiency'. The closing of gaps on the dimensions of time and quality was much less detrimental to the position of these middlemen. Until the Second World War, they were able to resist being cut out by market regulation agreements.

Date: 2003
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DOI: 10.1080/713999313

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