Competitive Advantage and Competition Policy in Developing Countries

Competitive Advantage and Competition Policy in Developing Countries

The CRC Series on Competition, Regulation and Development

Edited by Paul Cook, Raul Fabella and Cassey Lee

The book discusses competition from different theoretical perspectives and examines the implications these viewpoints have for policy. The contributors assess competitiveness in domestic markets and the impact of foreign competition. They also review the experiences of a range of countries in developing competition policy and examine both the strengths and weaknesses of these policies.

Chapter 13: Globalization and Competition in the South African Wine Industry

Joachim Ewert and Jeffrey Henderson

Subjects: development studies, development economics, law and development, economics and finance, competition policy, development economics, public sector economics, law - academic, law and development


Joachim Ewert and Jeffrey Henderson INTRODUCTION In studying the relation between global markets and agricultural industries and the consequences the processes involved have for inequality and poverty, the South African wine industry highlights many of the key issues in need of analytic and policy attention. Among these issues the questions of racial and class divisions within the industry, the implications of government competition and regulatory policies and the problems (for producer companies and workers) of being absorbed into the global value chains of oligopolistic retailers, are evident (Henderson, 2002). This chapter discusses these and cognate matters and briefly indicates some of the policy conclusions that seem relevant not only for this industry and for South Africa, but perhaps also for other export-oriented agricultural and agricultural processing industries elsewhere in the developing world. THE CHALLENGE In its most recent policy papers the South African wine industry defines the major challenge as ‘creating a vibrant, united, non-racial and prosperous South African Wine Industry’ (SAWB, 2003). While it acknowledges the significant progress made over the last decade or so, not least of which is a tenfold increase in exports, it admits that it still has a considerable way to go towards greater ‘competitiveness, sustainability and equity’. In a significant passage the SAWB’s (2003) Wine Industry Plan (WIP) admits that while there has been some progress in poverty alleviation in South Africa, this has largely been the result of progress in urban areas. Farm workers remain one of the...

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