These activities are capital-intensive. For those with enough pre-existing wealth to shoulder the heavy up-front costs, the profits can be enormous... ownership of the industry has grown increasingly concentrated. Most vineyard acreage in the region is ruled by a small collection of massive multi-national corporate conglomerates, which typically boast annual revenues greater than a billion dollars.More at the link, and more articles coming on this topic.
To hear the patriarchs of the wine industry tell it, by contrast, the typical area wine-making operation is a “bucolic,” family-owned business...
In reality, while there remain some area vineyards that possibly fit the Wine Commission web site characterization, a huge portion of Mendo's vineyard acreage is owned by corporate conglomerates that belong to the billion-dollar-a-year set. Most of the other wine-grape plantations are remotely controlled by decidedly non-local corporations with revenues of at least $50 million a year...
Over the years, wine industry robber-baron Jess Jackson has gone to perhaps the most absurd lengths of all to garb his company in a rustic wine-maker mystique. The company no longer refers to itself as Kendall-Jackson, but rather as Jackson Family Wines... “Little Guy” Jackson landed in the upper half of Fortune magazine's 2003 ranking of the world's 500 richest people, with personal wealth of $1.8 billion...
More to the point, the profits generated by local vineyards accrue almost entirely to the wine industry big boys. Just seven global wine conglomerates purchase the vast majority of wine grapes grown in the United States. The majority of these are grown in California. These companies produce 82 percent of all wine sold throughout the country. The majority of these enormous companies are integrated with other units of Big Alcohol; namely, spirits and beer.
The upshot? Regardless of who runs the actual grape production side, it's the large multi-nationals that ultimately reap the benefits of the local wine-growing economy – just as with virtually every other sector of America's agribusiness enterprise – at the expense of just about everyone and everything else...
As Wendell Berry has written regarding the corporate agribusiness model in general, “To put the bounty and health of our land, our only commonwealth, into the hands of people who do not live on it and share its fate will always be an error. Whatever determines the fortune of the land determines also the fortune of the people. If history has taught us nothing else, it has taught us that.”
29 December 2010
Large corporations masquerade as small businesses
A column at Counterpunch cites the example of California's wine industry:
I'm not sure whether this article was posted to be thought-provoking, or whether you agree with the article?
ReplyDeleteThis is just romanticism over local agriculture - and the local version of protectionism. It does not provide a single logical step between big corporation and... well almost anything in the article. All this article is trying to do is protect the fortunes of local wine-growers - without considering anyone else, including consumers and producers of other products.
This is not much different to the consideration of Wal-mart and local stores, wouldn't you say? And of course, the argument is just full of fallacies.
First is the so-called 'buy local' fallacy. That money must stay local, or otherwise the local community loses out. This is not an economic truism in the slightest. A really good illustration in this podcast, if you have time to listen: http://www.econtalk.org/archives/2007/04/boudreaux_on_th.html
The other is this 'big bad non-local corporation' fallacy. I saw an advertisement for beer near my house, which stated "made by hand, not by a corporation." But this doesn't make any sense - as if a corporation makes bad beer by a machine. And as if consumers necessarily want beer made by hand? How expensive will this beer have to be?
What annoyed me was this paragraph:
"Regardless of who runs the actual grape production side, it's the large multi-nationals that ultimately reap the benefits of the local wine-growing economy – just as with virtually every other sector of America's agribusiness enterprise – at the expense of just about everyone and everything else..."
How about consumers? People - surprisingly - always forget the consumer. In the Walmart scenario, it is not hard to argue that consumers are much better off, on both price and choice. What big corporations actually do best is providing consumers with lower price products - and I don't see the wine industry being un-competitive, such that these corporations are monopolies or something.
And then finally this paragraph: "To put the bounty and health of our land, our only commonwealth, into the hands of people who do not live on it and share its fate will always be an error. Whatever determines the fortune of the land determines also the fortune of the people. If history has taught us nothing else, it has taught us that.”
I say again, what logical step is there from corporate owned, to unhealthy and un-bountiful land? All this article is trying to do is protect the fortunes of local wine-growers.
Lol, sorry that was a big comment of mine - it didn't look so big squashed up in a comment box :)
ReplyDeleteBig comments are always welcome.
ReplyDeleteRe your question, I have no personal viewpoint or biases re California wines; we have a little rack with an assortment of them on the kitchen counter.
I do have some views on big agribusiness in general and Monsanto in particular, and my views are probably biased because of my distaff-family background as Midwestern single-family farmers.
I also have a negative view of the rape of the oceans, although that seems to be done both by corporations and by small businesses and individuals.
Sigh...