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The Key Role of Banks in the Lifecycle of Bordeaux Wine Cooperatives

Published online by Cambridge University Press:  18 April 2018

Julien Cadot  and
Adeline Alonso Ugaglia
Julien Cadot
Affiliation:
ISG Paris, ISG Lab, 147 avenue Victor Hugo 75116 Paris, France; e-mail: julien.cadot@isg.fr.
Adeline Alonso Ugaglia
Affiliation:
Bordeaux Sciences Agro, ISVV, UMR 1065 SAVE - 1, cours du Général de Gaulle, 33 175 Gradignan cedex, France; e-mail: adeline.ugaglia@agro-bordeaux.fr.
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Abstract

In this article, we investigate a possible conflict between two core objectives of cooperatives, members’ income, and continuity, by examining the link between debt and the price paid to producers for Bordeaux wine cooperatives, according to their downstream strategies: (1) the traditional strategy, which is to sell wine in bulk to négociants; (2) joining a federation of cooperatives which blends and puts the wine in the retail market; and (3) vertical integration. We show that downstream strategies are related to different lending regimes, making the relationship between banks and cooperatives a key issue for the lifecycle of cooperatives. (JEL Classifications: D230, G320, Q130)

Keywords

bankingcooperative federationcooperative financelifecyclevertical integration
Type
Guest Editor Günter Schamel: Symposium “Organization and Performance of Cooperative Firms in the Wine Sector”
Information
Journal of Wine Economics , Volume 13 , Issue 3 , August 2018 , pp. 309 - 327
Copyright
Copyright © American Association of Wine Economists 2018 

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Footnotes

The authors are grateful to the anonymous reviewer of the Journal of Wine Economics for helpful comments as well as well as to participants at the American Association of Wine Economists (AAWE) workshop in Bolzano, Italy, in 2017. They would like to acknowledge the support of the Fédération des Caves Coopératives d'Aquitaine (FCVA).

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