1 structure of the producing side of the wine industry: firm typologies, network of firms and...

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Structure of the producing side Structure of the producing side of the wine industry: Firm typologies, of the wine industry: Firm typologies,

network of firms and cluster network of firms and cluster

Etienne Montaigne

Alfredo Coelho

http://umr-moisa.cirad.fr

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IntroductionIntroduction

Two parts:

1.Theoretical approaches + the main research questions associated to the‘filière analysis’,

1. older references

2. the complementary approaches derived from more recent theoretical contributions.

2.General overview of the wine filiere, the main actors: grapegrowers, co-operatives, wine brokers, winemerchants + clusters

OIV - Commission MARCON 2013-03-11 - Paris

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Partie 1Partie 1

1. Theoretical approaches + the main research questions associated to the‘filière analysis’,

1. older references

2. the complementary approaches derived from more recent theoretical contributions

2. General overview of the wine filiere, the main actors: grapegrowers, co-operatives, wine brokers, winemerchants + clusters


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Part I - The « Part I - The « filière analysis »filière analysis »

1. Based on main historical theoretical streams1. Circuit: Technical / liberal productivist ref.

2. Marxist approach: Kautsky (1900)

3. Systemic analysis / general theory of systems

2. on four complementary /recent approaches:1. The innovation chains,

2. The Global Value Chain (GVC)

3. The theory of transaction costs

4. The marketing approach


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1 - Historical theoretical stream: Circuit (1700)1 - Historical theoretical stream: Circuit (1700)

1. “Circuit” introduced by Bois–Guillebert 1. The landowner spends his rent buying his

clothes made by the tailor.

2. The ‘worker’ is at the origin of the “circuit”

3. Graphic representation / “input–output” table

2. Adam Smith: division of labor1. Filière that leads to a pair of scissors:

2. “the miner, the builder of the furnace to melt down the mineral, coal maker, the adjuster, the blacksmith, the cutler”


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1 - Historical theoretical stream: Circuit1 - Historical theoretical stream: Circuit

3. “This notion of ‘circuit’ is closely associated with engineering sciences and thus to the technique as the means of explaining how goods are manufactured.

4. In agriculture, the term ‘technical itinerary’ is often used to describe the way the operations are interconnected.


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2 - Historical theoretical stream: Kautsky (1900)2 - Historical theoretical stream: Kautsky (1900)

1. Marxist = circuit + relationships between producers and the downstream industries.

“180 Swiss towns lost their economic autonomy and became subjects of the House of Nestlé”

2. Question = bargaining power

3. Approach guides researches with regard tomarket power, domination, transfer of productivity gains, the share of value added and prices


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3 - Historical theoretical stream: Systems3 - Historical theoretical stream: Systems

1. Systemic analysis defines filières as systems, a group of elements interacting and hierarchized in various levels.

2. Systems analysis leads to an understanding of the diversity and complexity of the real world and to an awareness of the complemen -tarities between the elements of the filière.

3. This reference ignores, to some extent, the theoretical explanations and the identification of causalities in economics,


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1 - Complementary approaches: 1 - Complementary approaches: Innovation chainsInnovation chains

1. We defined ‘innovation chain’ as a ‘group of firms and public or private organizations participating in the process of setting up technology, that is to say a solution for a technological paradigm, in its technical and economic appraisal within the companies concerned and therefore in the definition of a technological trajectory as a group of technological trajectories of the basic firms


OIV - Paris - 10 March 2008 10

Wine sect.

Translation 30 years

Mater. chem. researchWine

research

publicprivate

Big chem. groups

Membrane equip. manufacturers

product

Treat.-filt.-Process

Membrane making firms

ANTAV

INRA

Nurs.

Big Merchants

Dir. sale

Plant material

Plant material inn. sector

Wine grower,FP vine

Priv. Cell.

Coop

BusinessDir. sale

S-stores and s-markets

Consumer

process

1 - Complementary approaches: 1 - Complementary approaches: Innovation chainsInnovation chains

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2 - Complementary approaches: 2 - Complementary approaches: CCC & GVCCCC & GVC

1. Hopkins - Wallerstein (1977), Bair (2005)in Sociology of Development

2. study the territorial expansion of capitalism. They disapprove of the mainstream views of globalization and of continuous market expansion, as well as the theory of world-systems promoted by the French historian Fernand Braudel.


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3. They define the ‘commodity chain’ 1. starting from the downstream of the chain

2. from consumers to raw materials, back to the worker and his food.

4. Marxist reference remains highly present.

5. They observe globalization, its scale changes and mass production of ‘‘standard’’ goods (commodities)

6. The central goal here is to determine where, how and by whom the value is created and distributed across the filiere.


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6. The central goal here is to determine where, how and by whom the value is created and distributed across the filiere.

7. Considerable improtance is granted to the territorial and geographical dimensions, as well as the socio-institutional context

8. “buyer-driven chains” (BDC), controlled by the downstream actors, and the “producer-driven chains” (PDC), controlled by the upstream actors.


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3 - Complementary approaches: TCT3 - Complementary approaches: TCT

1. Ronald H. Coase, the Nobel Prize winner in 1991, and Oliver E. Williamson are by now widely recognized and in general use

2. Exchanges in markets or within firms produce “transaction costs”

3. These costs influence the organizational, contractual and strategic choices in the short and long term

4. The question of the nature of the firm and its boundaries


OIV - Commission MARCON 2013-03-11 - Paris15


Firm A

Firm A

Firm A

Firm B

Firm B

Firm B

market

contract

integration

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5. Role of transaction costs / “form” of filière. 5. The role of market intermediaries in the wine

industry “countryside wine brokers”

6. They are match-makers and their business profession minimize transaction costs

6. The “contracts theory”, renewing the perception of the contractual relationship in the only controversial dimension of bargaining power in order to share the value added as a function of the grape price level

7. The creation of a contractual quasi-rentOIV - Commission MARCON 2013-03-11 - Paris

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4 - Complementary approaches: 4 - Complementary approaches: Value chain - managersValue chain - managers

1. Michael Porter (1980)

2. The goal of this method = maximizing value creation + cost minimization.

3. It aims to develop a competitive advantage for one organization.

4. When applied to agricultural filières in developing countries, this method aims to foster both export growth and rural development


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1. No questions about the nature of the structure of the filière

2. Structure of the filière is already established.

3. It focuses on the determinants of the competitiveness independently of the bargaining power and of the resulting conflicts.


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4. It identifies the constraints imposed on4. producers relating to growth and

competitiveness,

5. limits to investments and therefore job creation,

6. political and institutional factors and

7. infrastructures impacting the market environment.


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5. The central idea: the value of the filière is determined by the consumer products must be ‘pulled-out’ by consumers and not ‘pushed-out’ by producers.

6. Must eliminate activities which do not create value and maintain or develop those which do create value

7. Particular attention is paid to cost reduction in order to meet customer demands when looking to reduce expenditure


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ConclusionConclusion

1. Updated synthesis of theoretical tools

2. The presentation of the filière almost always appeared as a ‘description’ for which we did not have enough theoretical references in order to provide a better understanding of the way the filière analysis was conducted.


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3. The traditional questions: 1. Technical itinerary / the laws of nature,

2. Technical progress

3. Actors’ specialization

4. Bargaining power within the filière

5. Share of value-added

6. Systemic breakdown

7. Mechanisms and laws regulating the system


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1. The above discussion provides a large panel of ‘tools’ to fine tune our knowledge about a large industrial sector

2. This group of instruments guides academic research and, used together, provides a more complete and detailed representation of an industrial sector.

3. The choice of questions is as essential as the way in which the research is conducted


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Partie 2Partie 2

1. Theoretical approaches + the main research questions associated to the‘filière analysis’,

1. older references

2. the complementary approaches derived from more recent theoretical contributions.

2. General overview of the wine filiere, the main actors: grapegrowers, co-operatives, wine brokers, winemerchants + clusters


1 structure of the producing side of the wine industry: firm typologies, network of firms and...

Documents

theoretical approaches

theoretical explanations

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systems analysis

complementary approaches

thefilire analysis

circuit relationships