Collectivity and differentiation: a tale of two wine territories

Abstract

To compete in global markets, winegrowers must balance the seeming contradictory needs for territorial reputation and differentiation. This paper examines how the Bordeaux wine territories of St-Emilion and Blaye construct self-governance to achieve that balance, and looks at the extent to which their efforts influence the regulatory and supply chain structures of the industry. I adapt common pool resource theory (CPR) as a framework for analysis because it posits a collectively generated asset that must be maintained through mutually agreed rules. I extend CPR by focusing on reputation rather than physical assets and by incorporating the need for differentiation. The co-evolution of collectivity and differentiation is traced to establish differing institutional structures. The mechanisms of cooperation—democracy, legitimacy, fairness, monitoring, enforcement, cost reduction—are analyzed and compared for effectiveness in integrating collectivity and differentiation and for achieving territorial ambitions.