The economic regulation of quality in the Italian VQPRD sector: which perspectives?

Abstract

The Appellation of Origin system is aimed at reducing consumer's information costs, assuring a minimum quality standard and wine typicity, as well as maintaining a diversified supply in order to satisfy consumer s tastes heterogeneity. The effectiveness of the system is menaced by quantity and quality uncertainty, free riding phenomena, vertical relationships complexity and hold- up risks. The long term risk of the drop of the collective reputation of the Appellation justifies the economic regulation of the supply by the sectorial Organizations. Thus, it is necessary to evaluate ther role in the construction of the competitive advantage of the quality wine system. Then, the question that we address in this paper is that of the effectiveness of the supply regulation of quantity and quality in the Italian system of Appellation of Origin. We analyze the current context of the Italian Appellation of Origin Chianti Classico and the mechanisms of the supply economic regulation. At first, we describe the structural and commercial characteristics of the Appellation, the vertical relationships among the agents, the trend of the most important economic indicators of the Appellation. Then, we provide an analysis of the current mechanisms of the economic regulation of supply, from the specific production requirement s to the role of the sectorial organisation in the Appellation quality strategy. Finally, we point out the problems and the possible evolutions of the Appellation of Origin's system, in the context of the Reform of the CMO of wine.Appellation of Origin, collective reputation, economic regulation of supply, sectorial organizations, Agribusiness,