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The Role of Contracts in Wine Grape Supply Coordination: An Overview

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  • Fraser, Iain

Abstract

In this paper the role of contracts in coordinating the supply of grapes between independent wine grape growers and wineries is examined. A review of technical issues that underpin the design and implementation of contracts provides insights into the wine industry. A review of the economics literature on contractual relations in the wine industry indicates that although grape contracts are important they are subject to a number of problems. In particular, the precise determination of grape quality is a source of tension, as are current pricing arrangements.

Suggested Citation

  • Fraser, Iain, 2003. "The Role of Contracts in Wine Grape Supply Coordination: An Overview," Australasian Agribusiness Review, University of Melbourne, Department of Agriculture and Food Systems, vol. 11.
    • Handle: RePEc:ags:auagre:132539
    DOI: 10.22004/ag.econ.132539
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    References listed on IDEAS

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    1. Peter Bogetoft & Henrik Ballebye Olesen, 2002. "Ten rules of thumb in contract design: lessons from Danish agriculture," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 29(2), pages 185-204, June.
    2. Hueth, Brent & Ligon, Ethan & Wolf, Stephen & Wu, Steven, 1999. "Incentive Instruments in Agricultural Contracts: Input Control, Monitoring, Quality Measurement, and Price Risk," Staff General Research Papers Archive 5237, Iowa State University, Department of Economics.
    3. Anderson, Kym, 2001. "Where In The World Is The Wine Industry Going?," 2001 Conference (45th), January 23-25, 2001, Adelaide, Australia 125531, Australian Agricultural and Resource Economics Society.
    4. Brent Hueth & Ethan Ligon & Steven Wolf & Steven Wu, 1999. "Incentive Instruments in Fruit and Vegetable Contracts: Input Control, Monitoring, Measuring, and Price Risk," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 21(2), pages 374-389.
    5. A. Golan & H. Shalit, 1993. "Wine Quality Differentials In Hedonic Grape Pricing," Journal of Agricultural Economics, Wiley Blackwell, vol. 44(2), pages 311-321, May.
    6. Crocker, Keith J & Masten, Scott E, 1991. "Pretia ex Machina? Prices and Process in Long-Term Contracts," Journal of Law and Economics, University of Chicago Press, vol. 34(1), pages 69-99, April.
    7. G Haughton & J Browett, 1995. "Flexible Theory and Flexible Regulation: Collaboration and Competition in the McLaren Vale Wine Industry in South Australia," Environment and Planning A, , vol. 27(1), pages 41-61, January.
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    Cited by:

    1. Salazar Idana & Galve Górriz Carmen, 2011. "Determinants of the Differences in the Downstream Vertical Integration and Efficiency Implications in Agricultural Cooperatives," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 11(1), pages 1-26, February.
    2. Alexandros Karakostas & Diogo M. De Souza Monteiro & Cosmos Adjei, 2025. "Double Moral Hazard in Contract Farming: An Experimental Analysis," Journal of Agricultural Economics, Wiley Blackwell, vol. 76(3), pages 640-650, September.
    3. Iain Fraser, 2005. "Microeconometric analysis of wine grape supply contracts in Australia," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 49(1), pages 23-46, March.
    4. Olmos, Marta Fernandez & Martinez, Jorge Rosell, 2011. "The Quality-Quantity Trade-off in the Principal-Agent Framework," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 11(01), pages 1-12, January.
    5. Hervé Lanotte & Aurélie Ringeval-Deluze & Erick Pruchnicki, 2022. "The stabilising effects on GVCs of multi-annual supply contracts between leading and subordinate firms: The example of champagne [Les effets stabilisateurs sur la CGV des contrats pluriannuels d’approvisionnement entre firmes leaders et firmes sub," Post-Print hal-04021392, HAL.
    6. Bill Pritchard & Matthew Tonts, 2011. "Market Efficiency, Agriculture and Prosperity in Rural Australia," Chapters, in: Matthew Tonts & M. A.B. Siddique (ed.), Globalisation, Agriculture and Development, chapter 3, Edward Elgar Publishing.
    7. Steiner, Bodo E., 2009. "The Extent and Nature of Contracting in the Wine Supply-Chain When Moral Hazard is Present," Staff Paper Series 154127, University of Alberta, Department of Resource Economics and Environmental Sociology.

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