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Commitment to commercialization and quality choices in the Champagne wine producer-distributor relationship

Author

Listed:
  • Jacques Laye

    (INRA)

  • Eric Giraud Héraud

    (INRA)

Abstract

We study the interaction in the Champagne wine producer/distributor relationship between the commitment of the producer to commercialization of a low quality wine and the high quality adjustment of the distributor. We show that this commitment can allow the producer to acquire all the pro t of the supply chain. However, at equilibrium, the distributor chooses a quality level that is superior to that obtained at the optimum of vertical integration, and manages to get a part of the pro t. The results we obtain allow us to analyze the evolution of wine supply chains when a new distributor appears and enters in competition with the producer.

Suggested Citation

  • Jacques Laye & Eric Giraud Héraud, . "Commitment to commercialization and quality choices in the Champagne wine producer-distributor relationship," Enometrica, Enometrica - Review of the Vineyard Data Quantification Society (VDQS) and the European Association of Wine Economists (EuAWE) - Macerata University, Faculty of Communications.
    • Handle: RePEc:mcr:jenome:wpaper00024
    as

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    More about this item

    Keywords

    Vertical relationships; Quality; Wine;
    All these keywords.

    JEL classification:

    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness

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