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Individual and Collective Reputations in the Wine Industry

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Abstract

Two seemingly opposite reputation models appear to coexist in the wine industry: geographic indications and collective reputation in the Old World on the first hand, and branded wines and individual reputation in the New World on the other hand. These models are the result of natural, economic, and institutional features of the wine industry. This chapter mostly focuses on the collective reputation model, its effects as well as its failures, to show that such a categorization might be simplistic. Both coexist more and more frequently on the same label, suggesting in some way a convergence of both reputational models.

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Notes

  1. 1.

    According to Banks and Overton (2010), the Old World–New World dichotomy, which structures much of the thinking about the wine industry, is not relevant anymore. Indeed, this segmentation neither represents the complexity of production and marketing in these broad regions, which are not homogenous, nor takes into account the rapidly expanding wine production and consumption in China and India, and even Brazil. These authors suggest the addition of a “Third World” category. Some other authors recommend creating a new niche in the global wine markets, a “Historic World,” which is dedicated to wine-producing countries using mostly indigenous grape varietals, such as Armenia, Georgia, or Israel (Keushguerian and Ghaplanyan 2015).

  2. 2.

    “The term ‘reputation’ expresses what is generally said or believed about the abilities and/or qualities of somebody or something” (Belletti 2000, p. 239).

  3. 3.

    “Fraud involved selling wine under the label of a private brand such as Moët & Chandon, or collective regional brands (Bordeaux or Champagne) when it had been produced elsewhere. Adulteration, by contrast, consisted of adding ingredients that were considered illegal or ‘unnatural’ to wine and the wine-making process like resin, honey, herbs but also lead and lead compounds” (Simpson 2011a, p. 7). For a series of examples, see Holmberg (2010).

  4. 4.

    Simpson (2005) shows that if establishing regional appellations has helped growers in winning back market power in the Bordeaux and Champagnevineyards, another response was shown in the Midi region (Languedoc area): the creation of producer cooperatives, better equipped than merchants to classify wines and guarantee quality for consumers, has provided incentives to plant quality vines and allow growers to capture the growing economies of scale in wine production and marketing. This creation occurred because the sector was united (small and large growers and even merchants also affected by low prices) and mass demonstration in 1907, previously unknown in France.

  5. 5.

    See https://historyandwine.com/2014/07/02/cahors-france-the-french-malbec-story/; retrieved September 15, 2016.

  6. 6.

    A great growth, such as Château Mouton Rothschild in Bordeaux, indicates the Pauillac appellation in the label, but it doesn’t make any explicit reference to Bordeaux as a collective umbrella.

  7. 7.

    See, for instance, Bordeaux producer brand Les Hauts de Pontet-Canet, which is usually awarded with a Pauillac appellation but didn’t get it for the 2012 vintage:

    http://www.decanter.com/news/wine-news/587659/pontet-canet-second-wine-loses-aoc-status?utm_source=Eloqua&utm_medium=email&utm_content=news+alert+link+24102014&utm_campaign=Newsletter-24102014

  8. 8.

    For a review of the country-of-origin effect on perceived quality, see Verlegh and Steenkamp (1999). For an analysis of the region-of-origin effect, see Van Ittersum et al. (2003).

  9. 9.

    Such as in 2003 with the US consumers’ boycott of French wines.

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  1. Kedge Business School, Bordeaux, France

    Florine Livat

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  1. Bordeaux Sciences Agro University of Bordeaux, Gradignan, France

    Adeline Alonso Ugaglia

  2. University of Bordeaux, Pessac, France

    Jean-Marie Cardebat

  3. University of Turin, Turin, Italy

    Alessandro Corsi

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Livat, F. (2019). Individual and Collective Reputations in the Wine Industry. In: Alonso Ugaglia, A., Cardebat, JM., Corsi, A. (eds) The Palgrave Handbook of Wine Industry Economics. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-98633-3_25

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