Minority Producers and Pricing in the Champagne industry: The Case of Female Grape Growers

A Ody-Brasier, I Fernandez-Mateo - Academy of Management …, 2015 - journals.aom.org
Academy of Management Proceedings, 2015journals.aom.org
We examine how minority-majority group dynamics among producers affect prices in the
market for Champagne grapes. Using proprietary transaction-level data, we find that female
grape growers--who are minority members in the growers' community--are able to extract
systematically higher prices from buyers than their male colleagues. We argue that the
underlying mechanism for this surprising pattern of results pertains to the relations
maintained by minority members. More specifically, in-depth fieldwork shows that female …
We examine how minority-majority group dynamics among producers affect prices in the market for Champagne grapes. Using proprietary transaction-level data, we find that female grape growers --who are minority members in the growers’ community--are able to extract systematically higher prices from buyers than their male colleagues. We argue that the underlying mechanism for this surprising pattern of results pertains to the relations maintained by minority members. More specifically, in-depth fieldwork shows that female growers get together to compensate for their isolation from the majority; as a result they develop their own price-setting norms, which are at odds with the majority’s. Free from abiding by male growers’ traditional market norms, they are able to share private information that allows them to extract higher prices. We discuss the implications of these findings for the study of how relationships shape price-setting processes, as well as for our understanding of inequality in markets.  
Academy of Management
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