The Impact of Changes in Regulatory and Market Environment on Sustainability of Wine Producers: A Structural Equation Model

Chinedu Obi,Gianluca Brunori,Fabio Bartolini,Daniele Vergamini

doi:10.36253/web-7689

Abstract

We explore the farmers’ perception of how different external drivers of changes in farming activities could lead to sustainability practices among wine producers. The general assumption is that regulatory and market forces can change the production strategies of wine producers, which could eventually lead to the adoption of sustainability practices. We presented the percentage sustainability practice (PSP) as a novel way of measuring sustainability. We developed a structural equation model (SEM) with 13 hypotheses to test our assumption for the wine supply chain in Tuscany (Italy). Among the market forces, we found that wine growers perceived access to credit to have a significant positive association with sustainability practices. We also found that the perception of change in regulatory instruments such as environmental regulation and Common Agriculture Policy can lead to sustainable practice if they improve access to credit. Our research provides evidence for medium-large scale wine producers, emphasising their role as carriers of innovation in the movement towards sustainable wine production.

Highlights

Wine sustainability seeks to balance economic viability, social equity and environmental soundness on the whole production and processing of wine, from grapes to wine and spirits (OIV, 2016)
Our research explores how different perception of external drivers of changes in farming activities could lead to sustainability practices among wine producers
This study explored a visual path representation of the relationship of perception about the external drivers of changes in farming strategies, and how they could lead to sustainability practices for wine producers

Summary

Introduction

Wine sustainability seeks to balance economic viability, social equity and environmental soundness on the whole production and processing of wine, from grapes to wine and spirits (OIV, 2016). The key drivers of sustainability in wine industries can be sufficiently divided into internal and external drivers. The internal drivers are the farm-level fac-. Brunori tors, including the managerial attitude and human capital required for the change to sustainable production. The strategic advantages that come with sustainability labels such as improving new market penetration, competitive advantages, corporate images and reputations are farm-level internal drivers of sustainability. The external drivers that may influence the decision of whether to adopt wine sustainability are pressures from outside. These include market pressure such as consumer demand, climatic pressures such as changes in weather, and regulatory pressures and incentives such as environmental policies and credit incentives from the government

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Conclusion