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Microeconometric analysis of wine grape supply contracts in Australia

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  • Iain Fraser

Abstract

This paper examines wine grape supply contracts used in the main grape growing regions of Australia. An empirical analysis provides insight into specific aspects of contract design and implementation. Statistical analyses of sample data reveal differences between regions in contract specifications. Lower quality grape growing regions place a greater reliance on grape quality assessment to determine bonus/penalty payments compared to higher quality regions. Contracts in higher quality regions place greater emphasis on explicit winery involvement and direction in vineyard management. Results indicate that longer duration contracts are more inclusive in terms of the number of clauses included. Evidence of risk shifting (i.e., winery to grower) for high quality grapes is reported, where the price received by growers is determined by the bottle price of the wine produced. Copyright 2005 Australian Agricultural and Resource Economics Society Inc. and Blackwell Publishing Asia Pty Ltd..

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  • 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.
  • Handle: RePEc:bla:ajarec:v:49:y:2005:i:1:p:23-46
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    Cited by:

    1. Traversac, Jean-Baptiste & Rousset, Sylvain & Perrier-Cornet, Philippe, 2011. "Farm resources, transaction costs and forward integration in agriculture: Evidence from French wine producers," Food Policy, Elsevier, pages 839-847.
    2. Fares, M'hand & Orozco, Luis, 2014. "Tournament Mechanism in Wine-Grape Contracts: Evidence from a French Wine Cooperative," Journal of Wine Economics, Cambridge University Press, vol. 9(03), pages 320-345, December.
    3. Paulson, Nicholas D. & Katchova, Ani L. & Lence, Sergio H., 2008. "Empirical Analysis of the Determinants of Marketing Contract Structures," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6080, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    4. Rachael Goodhue & Leo Simon, 2016. "Agricultural contracts, adverse selection, and multiple inputs," Agricultural and Food Economics, Springer;Italian Society of Agricultural Economics (SIDEA), pages 1-33.
    5. Oczkowski, Eddie & Bandara, Yapa, 2013. "CGE modelling, regional economies, water buybacks," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 57(3), September.
    6. Paulson Nicholas D & Katchova Ani L & Lence Sergio H, 2010. "An Empirical Analysis of the Determinants of Marketing Contract Structures for Corn and Soybeans," Journal of Agricultural & Food Industrial Organization, De Gruyter, pages 1-25.
    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.
    8. Paulson, Nicholas D., 2010. "An Empirical Analysis of the Determinants of Marketing Contract Structures for Corn and Soybeans," Staff General Research Papers Archive 31523, Iowa State University, Department of Economics.
    9. repec:oup:erevae:v:44:y:2017:i:4:p:634-657. is not listed on IDEAS
    10. Davis, Timothy R. & Ahmadi-Esfahani, Fredoun Z. & Iranzo, Susana, . "Demand under product differentiation: an empirical analysis of the US wine market," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society.
    11. Franken, Jason R. V. & Bacon, Kevin J., 2014. "Organizational Structure and Operation of the Illinois Wine Industry," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 43(1), April.
    12. Zoltán Bakucs, Lajos & Fertő, Imre & Szabó, Gábor G., 2010. "Contractual relationships in the Hungarian milk sector," IAMO Forum 2010: Institutions in Transition – Challenges for New Modes of Governance 52700, Leibniz Institute of Agricultural Development in Central and Eastern Europe (IAMO).
    13. Kumar, Shiv & Devender & Chakarvarty, Kavita & Chand, Puran & Dabas, J.P.S., 2007. "Mode of Operation and Performance of Contract Farming of Cottonseed in Haryana," Agricultural Economics Research Review, Agricultural Economics Research Association (India), vol. 20(1).
    14. Imre Ferto & Bakucs Lajos Zoltan & Sándor Elek & Csaba Forgacs, 2011. "Contracts in Hungarian Food Chains," MIC 2011: Managing Sustainability? Proceedings of the 12th International Conference, Portorož, 23–26 November 2011 [Selected Papers], University of Primorska, Faculty of Management Koper.
    15. Bardos, Krisztina & Ferto, Imre, 2006. "The Contract Choice of Retailers in Hungarian Beef Sector," 99th Seminar, February 8-10, 2006, Bonn, Germany 7746, European Association of Agricultural Economists.
    16. Miranda, Bruno & Chaddad, Fabio, 2016. "Transaction Costs, Capabilities, and Grape Procurement Strategies in U.S. Emerging Wine Regions," 2016 Annual Meeting, July 31-August 2, 2016, Boston, Massachusetts 235363, Agricultural and Applied Economics Association.
    17. Paulson Nicholas D & Katchova Ani L & Lence Sergio H, 2010. "An Empirical Analysis of the Determinants of Marketing Contract Structures for Corn and Soybeans," Journal of Agricultural & Food Industrial Organization, De Gruyter, pages 1-25.

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