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Home
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JWE-Articles
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Journal of Wine Economics Volume 18 | 2023 | No. 1
»
Making wine, selling grapes, or delivering to a cooperative? Determinants of grape allocation

Making wine, selling grapes, or delivering to a cooperative? Determinants of grape allocation

Alessandro Corsi, Simonetta Mazzarino and Vito Frontuto
JEL Clasification: C35; D22; Q12; Q13
Pages: 15–38
Full Text PDF
Abstract

A typical characteristic of the wine supply chain in the Old World is the significant share of cooperatives in wine-making that coexists with investor-owned firms and on-farm wine-makers. This paper analyzes the determinants of whether grape growers deliver their grapes to a cooperative winery of which they are members, sell their grapes to outside wineries, or make their own wine on their farm. Our analysis is based on data from a typ- ical wine-producing area in Northern Italy. The explanatory variables comprise the poten- tial prices linked to the different grape allocations and various farmer and farm characteristics. The high share of farmers delivering their grapes to cooperatives can, to a large extent, be explained by their higher price relative to one of the spot markets. On-farm wine-making is favored by larger farms and more educated farmers.

Keywords: cooperatives; grapes allocation; multinomial logit; nested logit; on-farm wine-making

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