Governing through Quality: Conventions and Supply Relations in the Value Chain for South African Wine

Abstract

Global value chain (GVC) analysis examines the dynamics of economic globalisation and international trade. The concept of GVC governance illustrates how ‘lead firms’ achieve certain functional divisions of labour along a value chain – resulting in specific allocations of resources and distributions of gains. In this article I argue that agri-food lead firms do not govern chains solely on the basis of buyer power, market share, and/or economies of scale or scope but also through normative work. In order to do so, I apply convention theory to the analysis of governance in the value chain for South African wine. I analyse how wine quality conventions applied in the UK are translated in South Africa into specific functional divisions of labour and supply relations, themselves underpinned by local configurations of quality conventions. The case study of wine suggests that lead firms are able to drive a value chain only when industrial and market conventions are dominant, such as in basic quality wine. These conventions are more portable and thus easier to transmit at a distance. Where other, less portable, conventions are more important in discovering quality, as in mid-range and top quality wines, the value chain is much more fragmented and less driven.