Publication: Cooperation and conflicts : institutional innovation in France's wine markets, 1870-1911
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2005
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Harvard Business School
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Very different commodity chains had been established over the centuries in France to produce and sell wines as diverse as champagne, fine old clarets, or ordinary table wines. The major shortages caused by the vine disease phylloxera after 1875 forced merchants to search for new sources of supply, often in foreign countries or through the production of artificial wines. When domestic production revived, however, the recovery was not accompanied by a noticeable reduction in these new supplies, with the result that prices, as well as growers' profitability, fell sharply after the turn of the twentieth century, strengthening the merchants' power in the various commodity chains. To overcome this situation, growers in three very different wine-producing areas, namely the Midi, Bordeaux, and Champagne, used their political influence to achieve government intervention in order to control fraud and establish regional appellations or producer cooperatives, which helped them win back some of their market power from merchants.
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Business History Review, Autumn 2005, vol. 79, nº 3, p. 527-558