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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. 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.
    4. 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.
    5. 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.
    6. 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.
    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. 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.
    3. 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(1), pages 1-12, January.
    4. 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’ap," Post-Print hal-04021392, HAL.
    5. 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.
    6. 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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