THE FRUIT OF REGULATION: WINE, REGULATIONS, SUBSIDIES, QUALITY AND COOPERATIVES IN FRANCO’S SPAIN AND BEYOND

Documento de Trabajo #2204

Título: The Fruit of Regulation: Wine, Regulations, Subsidies, Quality and Cooperatives in Franco’s Spain and Beyond

Autor/es: Samuel Garrido

Abstract:

Cooperative wineries are one of the cornerstones of the wine industry in Europe today. To explain how they reached this condition, I use the case of Spain and pay special attention to the period in which they took off in the country, the Franco dictatorship (1939-1975). Wine economists often believe that cooperatives produce mediocre wines because they cannot avoid the opportunistic behaviour of their members. I argue that they can prevent it and that the poor quality of their wine in some provinces was the result of the perverse stimuli provided by a badly designed market regulation policy.

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