Working Paper Category: Policy

In the United States the role of cooperation in economic affairs often is overlooked because Americans see themselves as individuals, and organize their affairs in competitive fashion. Competition means acting alone for individual success.
Cooperation is much different. Enterprises in the same business see one another not as rivals but as partners. Cooperation means acting together because in acting alone the individual member cannot succeed at all or succeed as well.
Acting together is the distinguishing feature of an authentic cooperative. It is an intermediate stage between acting alone and turning to the government for protection or assistance.
Overwhelmingly U.S. wine production originates with vineyards and wineries acting alone. Nevertheless, we uncovered a few instances where grapes are grown and wine is produced by enterprises acting together. Additionally, we identified four other types of cooperatives: grape-to-juice, wine wholesale, wine marketing, and wine-maker philanthropic.

Our intent in this working paper is to explore the extent of stealing, counterfeiting, and smuggling of wine without exploring in depth the extent to which such illegal practices specifically influence the price and quality of the wine that American consumers are purchasing. Our attention focuses primarily on bottled wine produced in the United States or imported.

As long as there are large ill-gotten gains to be had from stealing, counterfeiting, and smuggling, there will be persons willing to pursue those gains even at the risk of fines, jail time, and public disgrace. Just as hackers are able to penetrate the most secured and encrypted data bases, thieves, counterfeiters, and smugglers will find ways around even the most sophisticated detection and anti-fraud technology. The issue is not how to stop them but how best to limit the damage they do. We suggest nine ways to limit the ill-gotten gains of thieves, counterfeiters, and smugglers.