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As Humphrey and Schmitz (2002) pointed out, network relationships offer firms clearer
opportunities for upgrading than in more hierarchical arrangements. This does mean that
the Chilean wine sector may be rather unusual in that it is one of the few examples of
significant upgrading and bargaining power being enjoyed by developing country firms
within an agricultural or agro-industrial global value chain. Indeed Watts and Goodman
(1997: 14) argued that in global commodity chains in agriculture and agro-industry,
capital mobility has resulted in the centralization of power by retailers and suggested that
developing country firms (and farms) within these commodity chains had even less
bargaining power than developing country firms in the (clothing) manufacturing chains
studied by Gereffi (1999).
In contrast, many Chilean wine firms have developed the competences to supply a range
of supermarkets in an increasingly large number of countries. Rapid export growth has
particularly occurred with those countries where the process of retail concentration has
been significant. The Chilean wine producer has been able to establish a certain amount
of bargaining power within the value chain, much more, for example, than large-scale
farmers within Chile’s fruit value chain (Gwynne, 2003).
Nevertheless, export-oriented wine firms have become highly dependent on the
relationships they forge with large supermarket chains in core country markets. These
supermarkets have been successful in the scramble for value, at least within the value
chain linking Chilean producers with UK supermarkets. However, this value chain has
provided a vehicle for rapid growth in export volume for many Chilean wine producers.