Growth and sustainability of agricultural systems: the case of Sicilian wine-growing farms

The Sicilian wine-growing sector is characterised by the presence onthe one hand of many small enterprises that limit their activity to the first stageof the supply chain (field production) and on the other of few enterprises thatadopt a strategy of total vertical integration, from the production to the sale ofwine. The first group of enterprises operates in a competitive market and inmany cases with marginal revenues that are lower than marginal costs, leadingentrepreneurs to abandon the activity of grape production. The second groupoperates in an oligopolistic market and it is able to compete in an internationalmarket. Findings reveal that competitive advantage could be achieved loweringthe production costs, so as to arrive on the market with a lower cost withrespect to competitors. This strategy is particularly suitable for all those smallSicilian enterprises that operate in a competitive market and that limit theiractivity to the production phase.