Chianti Classico wine is one of the most important and oldest Italian red wine Denomination of Origin. In the wine sector its brand, the Black Rooster, is the most famous and know in the world. The structure of the DO is characterized by significant prices fluctuations of bulk wine, constant production and high land values. This situation has created uncertainty in farm investments and it has contributed to increase the supply in terms of surplus or stock. The particularity is also that DO is represented by formal institutions, contracts, branch and agreements and regulations between different producers’ categories. The purpose of this work is to reconstruct and explain the supply chain and bargaining during the bulk wine selling and price performance in one of most important and oldest Italian red wine Denomination of Origin (DO): Chianti Classico employing the Structure –Conduct and Performance (SCP) framework. The paper analyzes the DO structure and farmer’s conduct with the aim to understand the logic behind the price formation and their performance. The interdependence among the different firms shows a singular character on the collective dynamics, collusion systems and informal rules observed that regulate the bulk wine prices (through unspoken agreement), supply control instruments and territorial systems.
The Dynamic of Wine Supply and Price Formation in Chianti Classico Denomination
GAETA, Davide Nicola Vincenzo;
2013-01-01
Abstract
Chianti Classico wine is one of the most important and oldest Italian red wine Denomination of Origin. In the wine sector its brand, the Black Rooster, is the most famous and know in the world. The structure of the DO is characterized by significant prices fluctuations of bulk wine, constant production and high land values. This situation has created uncertainty in farm investments and it has contributed to increase the supply in terms of surplus or stock. The particularity is also that DO is represented by formal institutions, contracts, branch and agreements and regulations between different producers’ categories. The purpose of this work is to reconstruct and explain the supply chain and bargaining during the bulk wine selling and price performance in one of most important and oldest Italian red wine Denomination of Origin (DO): Chianti Classico employing the Structure –Conduct and Performance (SCP) framework. The paper analyzes the DO structure and farmer’s conduct with the aim to understand the logic behind the price formation and their performance. The interdependence among the different firms shows a singular character on the collective dynamics, collusion systems and informal rules observed that regulate the bulk wine prices (through unspoken agreement), supply control instruments and territorial systems.
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