2003, Volume 11, Paper 5

ISSN: 1883-5675

The Role of Contracts in Wine Grape Supply Coordination: An Overview

Iain Fraser – Department of Economics and Finance La Trobe University, Vic 3086 and Department of Agricultural Science Imperial College, Wye, UK

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.

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