Central California Winemaking Industry
Name
Institutional affiliation
Central California winemaking industry
How the economic concentration in Central California winemaking industry was influenced by competition and pricing
The Central California winemaking industry is among the biggest and most competitive in the country. Over the past two decades, the consolidation of players in this industry has been a common occurrence. Competition and pricing play an essential role in the economic concentration of the Central California winemaking industry. There are many world-class wine producers in central California (Hira & Swartz, 2014). When wine producers are involved in the horizontal competition, the strategic goals of many organizations are to find ways to increase their market share. Fierce competition in the central California winemaking industry is among the significant contributors to the increase in mergers and acquisitions in the region. Even though California produces more than 80% of US wine, the concentration of companies in the region has led to increased competition by both differentiation and pricing. The recent fall in the prices of grapes has significantly impacted the prices of wine in the region. High competition has led to increased cases of economic concentration, especially by the major players in the central California winemaking industry.