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Constructing quality: Producer power, market organization, and the politics of high value-added markets

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  • Carter, Elizabeth

Abstract

Economists assume increased producer flexibility creates production advantages. So why do inefficient French quality wine producers dominate their flexible, efficient Italian counterparts? French AOC wine producers created "corporatist" producer organizations which served three purposes: encouraged increased product quality information across the supply chain; allowed for the emergence of a unique production style; and enabled producers to define their production methods as "quality" via state regulation. Italian DOC wine producers have fragmented political structures at both the regional and national levels, causing producers to rely more on the price mechanism and less on political structures to coordinate supply chain transactions. Market asymmetries persist across the supply chain, making it difficult for producers to guarantee quality and adversely shaping their potential production and brand strategies. Solving supply chain problems through representative political institutions yields superior economic outcomes than uncoordinated market transactions because the former corrects market power asymmetries.

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  • Carter, Elizabeth, 2015. "Constructing quality: Producer power, market organization, and the politics of high value-added markets," MPIfG Discussion Paper 15/9, Max Planck Institute for the Study of Societies.
    • Handle: RePEc:zbw:mpifgd:159
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    References listed on IDEAS

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    1. Lucien Karpik, 2010. "Valuing the Unique: The Economics of Singularities," Economics Books, Princeton University Press, edition 1, number 9215.
    2. Beckert, Jens & Rössel, Jörg & Schenk, Patrick, 2014. "Wine as a cultural product: Symbolic capital and price formation in the wine field," MPIfG Discussion Paper 14/2, Max Planck Institute for the Study of Societies.
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    2. Peter Gal & Attila Jambor, 2020. "Geographical Indications as Factors of Market Value: Price Premiums and Their Drivers in the Hungarian Off-Trade Wine Market," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 12(2), June.

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