Vertical Integration and Financial Performance of French Wine Farms and Co-operatives
Adeline Alonso Ugaglia () and
Julien Cadot ()
Additional contact information
Adeline Alonso Ugaglia: Bordeaux Sciences Agro, University of Bordeaux
Julien Cadot: Institut Supérieur de Gestion (ISG), Paris, France and Department of Agricultural and Applied Economics at Virginia Tech
Chapter 21 in The Palgrave Handbook of Wine Industry Economics, 2019, pp 403-419 from Springer
Abstract:
Abstract In this chapter, we gather results about vertical-integration strategies of wine farms (and especially co-operative members compared to the others) and wine co-operatives in France to explore wine farms’ performance in relation to their vertical-integration level. We discuss the interest that the wine co-operatives could find in forming commercial unions as the best downstream strategy. The results show that vertical integration for wine-grape producers can be carried out at the farm level or collectively via co-operative membership. In both cases, it seems that operating on the bulk-wine market is not profitable. Indeed, bulk-wine producers display low financial performance, and “traditional” co-operatives seem to be affected by short-termism, by prioritizing the payment to producers over the co-operative’s sustainability. As such, vertical integration appears as an efficient way to create value for wine-grape producers, but it should not stop at the bulk-wine production stage. They should rather bottle the wine. Moreover, vertical integration requires a full consideration of costs and investments necessary to perform well. This implies specific learning and presents wine-grape producers with new challenges, whether they choose to perform vertical integration either alone or within a co-operative.
Date: 2019
References: Add references at CitEc
Citations:
There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.
Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-319-98633-3_21
Ordering information: This item can be ordered from
http://www.springer.com/9783319986333
DOI: 10.1007/978-3-319-98633-3_21
Access Statistics for this chapter
More chapters in Springer Books from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().