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31-524: KWV was founded as a winemaking co-operative on 8 January 1918 by wine makers from the Western Cape in South Africa , with Dr. Charles Kohler as its chairperson. The name “Koöperatieve Wijnbouwers Vereniging van Suid-Afrika” is Dutch for "Co-operative Winemakers Union' of South Africa". The purpose of KWV was to create unity amongst the wine farmers of South Africa and to ensure continuous improvement in

62-429: A general sense, but only in a relative sense: Is there, then, such a thing as overproduction? Manifestly, there cannot be, in any general sense, until more wealth is produced than is wanted. In any unqualified sense, over- production is preposterous, when everywhere the struggle to get wealth is so intense; when so many must worry and strain to get a living, and there is actual want among large classes. The manner in which

93-606: A large proportion of wine production. Figures of around 60 percent have been quoted for Italy ’s cantina sociale and cooperatives in Spain and Portugal . However, in contrast to the situation in France and Germany, a large proportion of cooperative members' wine is not bottled by the cooperative, but instead is sold in bulk for bottling by commercial operators or, especially in the case of Spain, for distillation . In South Africa , KWV ( Koöperatieve Wijnbouwers Vereniging van Zuid-Afrika )

124-622: A subsidiary of Niveus Investments, part of the HCI black empowerment investment group, and was the only South African producer listed on Drinks International's Most Admired Wine Brands Global register. In October 2016, KWV was acquired by the Vasari group under leadership of Mr Vivian Imerman. Based in London, Vasari is a consumer focused investment group that acquired the operational assets of KWV for ZAR 1.15 billion. KWV Brandies are regular winners of Best brandy of

155-466: A total of 51 000 members and 32,115 hectares (79,360 acres) vineyard surface. There has been a trend to fewer cooperatives (275 existed in 1998/1999) due to fusions. A special form of winemaking cooperative is the Zentralkellereien , a centralized cooperative found in many German wine regions, where local cooperatives rather than individual growers deliver grapes, grape must or wine. Therefore, of

186-627: A very low level, while grapes in Champagne command much higher prices as long as they fulfill some basic criteria. In France , winemaking cooperatives are typically called caves coopératives , and produce more than half the total amount of French wine. The first winemaking cooperative was established in Alsace in 1895, although at this time Alsace was part of the German Empire rather than France. Members of French winemaking cooperatives own more than half

217-621: Is the excess of production above consumption, this reduction in consumption worsens the problem. This creates a "feed-back loop" or " vicious cycle ", whereby excess inventories force businesses to reduce production, thereby reducing employment, which in turn reduces the demand for the excess inventories. The general reduction in the level of prices ( deflation ) caused by the law of supply and demand also forces businesses to reduce production as profits decline. Reduced profits render certain fields of production unprofitable. Henry George argued that there could not be any such thing as overproduction in

248-506: The economic value of this wealth, thereby lowering the rate of profit —a tendency that leads to the paradox, characteristic of crises in capitalism, of " reserve army of labour " and of “poverty in the midst of plenty”, or more precisely, crises of overproduction in the midst of underconsumption. John Maynard Keynes formulated a theory of overproduction, which led him to propose government intervention to ensure effective demand . Effective demand are levels of consumption that corresponds to

279-449: The wine laws of the country in question, which is sometimes an advantage in marketing. The French term corresponding to this is mis(e) en bouteille à la propriété , while the German is Erzeugerabfüllung . Producing and marketing wine on their own is usually not a realistic possibility for many vineyard owners with small holdings. However, being a member of a winemaking cooperative is not

310-518: The 209 cooperatives existing in Germany in 2008/2009, only 120 actually produced wine on their own premises. Cooperatives are particularly important in Württemberg , where they account for 80% of the production (2008), Baden , where they account for 76%, and the smallest German wine regions Ahr, Hessische Bergstrasse , Saale-Unstrut and Saxony . In southern Europe, cooperatives are responsible for

341-608: The basis of this legislation, Winzerverein Mayschoß , was established in 1868 in the Ahr region and is the oldest German winemaking cooperative still in existence. Two thirds of all German vine-growers belong to a cooperative, but because of a dominance of small vineyard holdings and part-time vine growing among these members, their production is slightly less than one-third of the German total. In 2008/2009, there were 209 cooperatives in Germany with

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372-460: The cooperative, which is involved in production of wine from the grapes and the subsequent marketing activities. Winemaking cooperatives are responsible for a significant proportion of the total wine production in many major wine-producing countries, including most of the classical European wine countries, but their importance varies much between different wine regions within these countries. Cooperatives tend to be more important in regions where

403-454: The core of the capitalist economy, creates a dynamic whereby an abundance of commodities has negative consequences. In essence, an abundance of commodities disrupts the conditions for the creation of profit. The overproduction of commodities forces businesses to reduce production in order to clear inventories. Any reduction in production implies a reduction in employment . A reduction in employment, in turn, reduces consumption. As overproduction

434-448: The hands of businesses . Overproduction is a relative measure, referring to the excess of production over consumption . The tendency for an overproduction of commodities to lead to economic collapse is specific to the capitalist economy . In previous economic formations, an abundance of production created general prosperity. However, in the capitalist economy, commodities are produced for monetary profit . This so-called profit motive ,

465-567: The industry was lifted with the end of Apartheid in 1990 and subsequent change in government, and in 1997 converted from a co-operative to a company structure. In 2004, KWV negotiated the South African wine industry's largest Broad-Based Black Economic Empowerment (BBBEE) deal with Phetogo (Pty) Ltd, attaining 25.1% shares. For the first time, KWV products entered the local market with its branded wines and brandies, having previously only been available to international consumers. In 2010, KWV formed

496-506: The level of production. If effective demand is achieved then there is no overproduction because all inventories are sold. Importantly, Keynes acknowledged that such measures could only delay and not solve overproduction. Say's law states that "The more goods [for which there is demand] that are produced, the more those goods (supply) can constitute a demand for other goods". Keynes summarized this "law" as asserting that " supply creates its own demand ". The consumer's desire to trade causes

527-417: The only option available. Selling grapes on the open market, entering into long-term contracts with negociants or other winemaking companies and leasing out the vineyard to certain negociants are other options. The relative attractiveness of these options varies greatly between regions. As an example, in regions characterised by constant overproduction of wine, the market price of grapes is often depressed to

558-401: The overproduction of which we hear so much is evidently of this character. Karl Marx outlined the inherent tendency of capitalism towards overproduction in his seminal work Das Kapital . According to Marx, in capitalism , improvements in technology and rising levels of productivity increase the amount of material wealth (or use values ) in society while simultaneously diminishing

589-413: The possibility of unemployment . The demand side equivalent is underconsumption ; some consider supply and demand two sides to the same coin – excess supply is only relative to a given demand, and insufficient demand is only relative to a given supply – and thus consider overproduction and underconsumption equivalent. In lean thinking , overproduction of goods or goods in process is seen as one of

620-443: The potential consumer to become a producer to create goods that can be exchanged for the goods of others, goods are directly or indirectly exchanged for other goods. Because goods can only be paid for by other goods, no demand can exist without prior production. Following Say's law, overproduction (in the economy as a whole, specific goods can still be overproduced) is only possible in a limited sense. Overproduction raises issues about

651-420: The production of other commodities, that the whole quantity produced cannot be exchanged for enough of those other commodities to give the usual returns to the capital and labor engaged in bringing them to market. This disproportionate production of some things, which is overproduction in relation to the production of other things, is the only kind of overproduction that can take place on any considerable scale, and

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682-454: The quality of South African wines and brandies. From the early 1920s, the co-operative was granted increasing legislative control over the production, sale and export of South Africa's distilling wine and spirits, which allowed the body to experiment with innovations in the industry which aided its development. The organisation also invested a great deal in the promotion of South African wine and brandy both locally and abroad. KWV's legal hand over

713-414: The seven wastes (Japanese term: muda ) which do not add value to a product, and is considered "the most serious" of the seven. Overproduction is often attributed to previous overinvestment – creation of excess productive capacity , which must then either lie idle (or under capacity), which is un profitable , or produce an excess supply. Overproduction is the accumulation of unsalable inventories in

744-542: The shoes is first and strongest; and upon the terms on which I can get the shoes may in large measure depend my ability to get the handkerchiefs. So, in the aggregate demand for the different forms of wealth, there is a similar relation. And as, under the division of labor characteristic of the modern industrial system, nearly all production is carried on with the view, not of consumption by the immediate producers, but of exchange for other productions, certain commodities may be produced so far in excess of their proper proportion to

775-439: The strain of the war was borne shows how great are the forces of production which, in normal times, go to waste; proves that what we suffer from now is not overproduction, but underproduction. Relative overproduction there, of course, may be. The desires for different forms of wealth vary in intensity and in sequence, and are related one with another. I may want both a pair of shoes and a dozen pocket-handkerchiefs, but my desire for

806-467: The time before the later association laws were established. A union of winemakers in Neckarsulm in Württemberg pressed grapes and sold the resulting must, and to some extent also wine, cooperatively as early as 1834. Prussia passed an association law ( Genossenschaftsgesetz ) in 1867, which became law in the entire North German Confederation in 1868. One of the first winemaking cooperatives founded on

837-560: The total French vineyard surface. The caves have their greatest strength on the Vin de pays level, where they are responsible for about three-quarter of the production. They have been involved in the large-scale switch over of the French wine production from the lower Vin de table category to Vin de pays. Many cooperatives also produce an impressive range of Appellation d'origine contrôlée (AOC) wine. The total number of French winemaking cooperatives

868-877: The wine’s selling price is relatively low and average size of vineyard holdings is small. While some winemaking cooperatives were established in the 19th century, the majority were established in the early 1930s following the Great Depression . The advantage to members of a cooperative, in comparison to pursuing winemaking and marketing on their own, consists in pooling resources and sharing costs for winemaking and marketing, which call for costly equipment and technical expertise. There are also other financial advantages, including certain European Union subsidies for cooperatives located in EU countries. Wines from cooperatives are often allowed to be described as producer-bottled according to

899-575: The world and best brandy and cognac producers of the world accolades. The KWV Headquarters and main production complex are situated in the Cape Winelands in Paarl . Winemaking co-operative A winemaking cooperative is an agricultural cooperative which is involved in winemaking , and which in a similar way to other cooperatives is owned by its members. The members in a winemaking cooperative are usually vineyard owners, who deliver grapes to

930-455: Was originally formed as a winemaking cooperative which also had certain regulatory privileges akin to those of a government agency . However, in 2002, KWV was transformed into a regular commercial company. Overproduction In economics , overproduction , oversupply , excess of supply or glut refers to excess of supply over demand of products being offered to the market . This leads to lower prices and/or unsold goods along with

961-579: Was over 850 in the early 2000s, with an average membership of 160 per cooperative in the 1990s. Cooperatives are particularly strong in Languedoc , Roussillon , Rhône , Provence and Corsica . Some of the more notable cooperatives are also found in Alsace and Chablis . In Germany , a winemaking cooperative is often called Winzergenossenschaft , but can also be called Winzerverein , Winzervereinigung , Weingärtnergenossenschaft or Weinbauerverband . The earliest German winemaking cooperatives date back to

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