IDEAS home Printed from https://ideas.repec.org/p/ags/aawewp/295015.html
   My bibliography  Save this paper

Margins of Fair Trade Wines Along the Supply Chain: Evidence from South African Wine on the U.S. Market

Author

Listed:
  • Back, Robin M.
  • Niklas,Britta
  • Liu, Xinyang
  • Storchmann, Karl
  • Vink, Nick

Abstract

In this paper, we analyze profit margins and mark-ups of Fair Trade (FT) wines sold in the United States. We are particularly interested in whether and to what extent the FT cost impulse in production is passed on along the supply chain. We draw on a limited sample of about 470 South African wines sold in Connecticut and New Jersey in the fall of 2016; about 90 of them are certified FT. For these wines we have FOB export prices, wholesale prices, and retail prices, which allows us to compute wholesale and retail margins and analyze the FT treatment effect. We run OLS, 2SLS and Propensity Score Matching models and find evidence of asymmetrical pricing behavior. While wholesalers seem to fully pass-through the FT cost effect, retailers appear to amplify the cost effect. As a result, at the retail level, FT wines yield significantly higher margins than their non-FT counterparts

Suggested Citation

  • Back, Robin M. & Niklas,Britta & Liu, Xinyang & Storchmann, Karl & Vink, Nick, 2019. "Margins of Fair Trade Wines Along the Supply Chain: Evidence from South African Wine on the U.S. Market," Working Papers 295015, American Association of Wine Economists.
    • Handle: RePEc:ags:aawewp:295015
    DOI: 10.22004/ag.econ.295015
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/295015/files/AAWE%20WP%20244.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.295015?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    More about this item

    Keywords

    Agricultural and Food Policy; Industrial Organization;

    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L31 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Nonprofit Institutions; NGOs; Social Entrepreneurship
    • L43 - Industrial Organization - - Antitrust Issues and Policies - - - Legal Monopolies and Regulation or Deregulation
    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce
    • Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:aawewp:295015. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/aaweeea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.