Resilience and transformation of the co-operatives of wine in Castilla-La-Mancha (Spain)

TOPIC #14 ES5 MICRO (OS-3E) - The purpose of this paper is to study whether there exist differences in the performance of the co-operatives of wine as a result of the big transformation in the sector. The rationale and... [ view full abstract ]

TOPIC #14 ES5 MICRO (OS-3E) - The purpose of this paper is to study whether there exist differences in the performance of the co-operatives of wine as a result of the big transformation in the sector. The rationale and significance for such study is twofold. First, the sector has undergone a major restructuring as a consequence of a legal transformation in the Common Market Organization (CMO) and the financial crisis after 2007. Second, the coops of wine have made substantial efforts in terms of strategies. Particular strategies developed, serve to capture environmental conditions and use them in their favour.

The arguments for and against using different strategies to compete in the market are related with different typologies of cooperatives. Based on previous papers (Castillo-Valero et al, 2015, Madero, S., 2015) we identify different strategies of the cooperatives to be resilient of changes as a consequence of financial crisis.

Our contribution is to identify different groups of cooperatives of wine and present their performance, to understand their financial strengths. Also, we consider the appropriateness of the ratios to measure the performance in the cooperative sector. Traditional ratios of profitability such as ROA or ROI doesn’t reflect the objective of the cooperatives. We propose other measure Profitability of cooperative member and we compare these measures to identify the performance.

With these indexes, we propose to test the following hypotheses, designed to test for differences in performance:
H1: There are no differences in performance due to the size configuration, i.e. between small and big cooperatives.
H2: There are no differences in performance due to legal regulation, i.e. between before and after 2008 CMO
H3: There are no differences in performance due to strategies, i.e. between, exportation, market orientation and investments.

Our sample consists of the financial and income statements of cooperatives of wine of Castilla-La-Mancha, deposited the said statements in the Cooperative Registrar’s Office. The test of these hypotheses consist of comparison of means between different typologies of cooperatives and their performance assessing. Preliminary analysis indicates that there are differences in the performance as a consequence of strategies adopted by the co-op wineries.

Castillo, S.; Simon, K. and García, M.C. (2015): Impacto de la crisis en las cooperativas de vino: desempeño y estrategias en Castilla-La-Mancha. ITEA, Vol. 111 (2), 174-195.

Madero, S. (2015): Desempeño de las bodegas cooperativas de Castilla-La-Mancha en etapas de expansión y crisis. PhD Thesis, University of Castilla La Mancha.