PROFITABILITY OF COMPANIES FORMING COLLECTIVE BRANDS IN THE WINE SECTOR

Abstract

The aim of this study is to analyze the profitability of companies forming collective brands in the Spanish wine sector. The central hypothesis is that collective brands may explain the profitability of their member wineries as collective reputation is a sign of quality that reduces consumer risk perceptions. The results obtained show that only some specific collective brands have a positive effect on the profitability of the wineries compared to those wineries that do not belong to these collective brands. Further, profitability is positively related to diversification into two or more collective brands.