Producer cooperatives and regulation in Europe's wine industry, 1880-1980

Wine cooperatives were relatively scarce in Europe before the Second WorldWar, but accounted for more than half of all wines made in France, Italy, and Spain, thethree major producer countries, by the 1980s. This article argues that their initial slowdiffusion was caused by the difficulties in measuring and controlling grape quality, andthat this provided incentives for members to produce large volumes of poor fruit whichadversely affected the wines. Cooperatives only became popular when the state offeredmaterial incentives to growers that helped compensate these problems of collectiveaction. This initially involved cheap credit to help build wineries but, from the 1950s,growers enjoyed additional incentives to join cooperatives as governments attempted toregulate wine markets and provide income support. The problems associated with grapequality were never resolved and, with the major decline in consumption from the 1980sand move away from bulk towards premium wines, cooperatives became increasinglyuncompetitive in the market place.