In vino veritas? The development of producer trust and its market effects in regulated French and Italian quality wine markets

Betsy Carter

Chapter 5 in Trust in Regulatory Regimes, 2017, pp 115-144 from Edward Elgar Publishing

Abstract: Both French and Italian quality wine regulation developed as a means of creating a protected market by guaranteeing a traditional, limited-quantity product. But consumer trust in the private, government-backed mark varies significantly in France and Italy, and France manages to obtain significantly higher prices for regulated AOC wine than their Italian DOC counterparts. This article investigates the origins of divergent trust patterns as well as the relationship between trust and production strategies. My research indicates trust patterns are shaped by the structure and operation of the regulatory regime. Drawing upon extensive personal interviews, I find price differentials and trust in the regulatory mark may be explained by three factors: administrative historical legacy and government trust, trust among supply chain actors, and market structure. Higher institutionalized trust—or trust in the regulatory regime—is associated with higher quality production, higher prices, less price-based competition, and less market concentration.

Keywords: Business and Management; Economics and Finance; Politics and Public Policy (search for similar items in EconPapers)
Date: 2017
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