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

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

By | July 2010
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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 | |Introduction | |Measuring Wine Grape Quality | |Contracts and Supply Coordination | |Contracts and Grape Production - Current State of Knowledge | |Summary and Conclusions | |References |

Acknowledgements:
The financial support of a Faculty of Law and Management Grant is acknowledged. Thanks to Lee Smith, Garry Griffith and an anonymous referee for comments on an earlier draft of this paper and seminar participants at the La Trobe University, Bundoora, Shepparton and Albury-Wodonga Campuses. 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. 1. Introduction

In 2001 Australian grape growers delivered over 1.4 million tonnes of grapes to wineries, an increase of...

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