Governance for Sustainability: Patterns of Regulation and Self-Regulation in the German Wine Industry

Abstract

To foster sustainability pursuits, regulation by state-imposed legislation is often crucial, but self-regulation by corporations, associations, and other non-state actors increasingly exerts pressures and provides incentives for sustainable practices. In order to shed more light on the complex interplay among sustainability regulations and self-regulation, this study focused on a highly regulated field: the German wine industry. Using a social network analysis, this study identified the most central actors (e.g., associations, regulatory institutions) that need to be addressed in order to ensure the enforcement of sustainability. By analyzing 15 semi-structured interviews with the key actors, we outlined their understanding of sustainability, and classified three distinctive governance patterns. These mixed methods and in-depth analyses revealed that self-regulation by associations plays a crucial role in terms of enhancing sustainability, but regulation remains an important trigger in this context. This article concludes with some lessons for regulation and self-regulation policies that can ensure sustainability within an organizational field.

1. Introduction

Regulation, legislation, and national standards powerfully encourage sustainability in modern economies [1,2]. Self-regulation by corporations and other non-state actors also reflects some of the increasing pressures and incentives for sustainability [3]. According to Santini et al. [4] (p. 4), a “key factor of success in spreading sustainable practices is local players’ networking capacity”. In order to clarify the complex interplay of sustainability actors, we focus on the German wine industry. The wine industry is subject to many regulations—imposed by the European Union as well as agricultural ministries at federal and state levels—so it is a particularly suitable organizational field for this study. Alongside our empirical study, several topics emerged that we connect to previous research on sustainability in this paper, i.e., organizational fields, regulation, and self-regulation.

In order to analyze the interplay of various actors alongside particular structures and processes—such as regulation, self-regulation and governance—organizational fields provide a conceptual heuristic [5,6]. That is, an organizational field constitutes “a recognized area of institutional life; key suppliers, resource and product consumers, regulatory agencies and other organizations that produce similar services or products” [6] (p. 148), such that it captures communities with similar functions, their environments, and their interrelations [7]. Accordingly, we treat the organizational field “as a collection of contextual factors or conditions affecting organization structures or processes” [8] (p. 136).

The organizations within an organizational field tend to be homogeneous, due to the structuring of the field, which is shaped by state-imposed regulation, professional standards, and competition. This tendency is also called isomorphism, and can further be distinguished into coercive, normative, and mimetic isomorphism [6]. Institutional logics, which are “socially constructed, historical patterns of material practices, assumptions, values, beliefs and rules” [9] (p. 803), constitute the context within which organizations function [5,10]. It is impossible to analyze individual or organizational behavior without considering the societal context [11]. The impacts of institutional logics on behavior may be stronger or weaker depending on an organization’s ties with other members [12,13]. Furthermore, contingent on their status, network-based organizations such as trade associations may have significant influences in terms of defining subjects and spreading related concepts and practices [10,14,15].

2. Achieving Sustainability through Governance

2.1. Theoretical Background

Sustainability conveys a connection between global equity, as a political target, and the related discourses on human development as it pertains to environmental resources and fragile ecosystems. Accordingly, sustainability is a hybrid concept, featuring both normative (intra- and intergenerational justice) and systemic (human–nature interaction, socio-ecological processes) foundations [16]. At an organizational level, the success of an organization should be measured not only by its economic value but also its environmental performance and social fairness (i.e., the triple bottom line [17]). Despite the similarity in these persistent definitions, sustainable development remains an elusive concept that still raises questions about how it can be achieved [18]. One key component stems from goal-directed interventions by governments and other actors; as [19] (p. 300) notes, “Sustainable development is an internationally recognised goal which governments (and other organisations with governance responsibilities) ought to pursue.”

Governance implies interference in public or private entities in order to realize collective goals [16]. This notion accords with an increasing number of studies claiming that modern obligations for governance are shared among the state, the market, and civil society [20,21,22,23]. Sustainability is a particular mutual interest in this context. Therefore, governance for sustainable development refers to “public debate, political decision-making, policy formation and implementation, and complex interactions” among interested parties [19] (p. 299), including the joint promotion of societally-transformational actions by governments, market actors, and civil society [16]. Consequently, “the integration of sustainability into general practices of governance” is considered a key task [19] (p. 302), whereas other sources cite a crisis of governance when it comes to the lack of sustainability in development patterns [24,25,26]. Because the question of how to govern society to foster sustainability remains unanswered [16], governance practices need to be repositioned toward sustainable development. This need represents the starting point and motivation for our study.

2.2. Sustainability Governance as an Interplay of Regulation and Self-Regulation

In order to achieve sustainability, society could rely on goal-directed intervention by the government, in the form of regulation, or “a state-imposed limitation on the discretion that may be exercised by individuals or organizations, which is supported by the threat of sanction” [27] (p. 297). In more detail, regulation refers to an action by government that interferes in the individual autonomy of the focal players, including general rules that apply to all industries [28]. Through regulation, the public sector can restrict the actions and disposal rights of specific businesses and industries, such as their market access, service ranges, or pricing policies.

However, regulation can also be inefficient and open to subversion [29]. Dominant industry interests often pervert the intended, public-oriented goals of regulatory regimes [30]. This may result in regulatory capture, which refers to the “result or process by which regulation, in law or application, is consistently or repeatedly directed away from the public interest and toward the interest of the regulated industry, by the intent or action of the industry itself” [31] (p. 13). Regulatory capture also seems closely related to lobbying, or “activities undertaken with the aim of influencing legislative/regulatory processes and outcomes” [32] (p. 263). Lobbying is an important dimension of organizations’ political engagement that can have positive or negative impacts on sustainability [33]. Accordingly, we concur that regulation can be a way to solve environmental problems, but it is not feasible for many sustainable concerns [34].

In addition to regulation, self-governance [35] or self-regulation [36,37] within an industry might lead to sustainability, because they entail voluntary standards and rules developed by organizations within a particular industry without direct intervention by the state [38]. When organizations jointly agree to act collectively, they might circumvent a common threat or provide a common good by establishing a standard code of conduct [38]. Dingwerth and Pattberg [5] assert that organizations are increasingly responsible for setting norms, standards and rules; however, a distinction is also made between rule making and other types of organizations. The increasing presence of rule-making organizations also implies a strategic shift from lobbying for new regulations to devising and implementing rules themselves [39]. Several studies thus emphasize the potential emergence of new beliefs and codes of conducts within organizational fields [36,38,40,41], in line with the observation that self-regulation is increasingly important as a means to establish pressures or incentives for sustainable practice and environmental performance in an industry [3]. In terms of normative isomorphism, self-regulation can support the emergence of new norms and values that change members’ preferences for collectively-valued actions [36]. However, self-regulation without explicit penalties or sanctions may be insufficient [38,42], or may even lead to opportunistic behaviors if individual organizations participate in collective action to disguise their poor performance [38,43]. Monitoring processes and sanctioning mechanisms for self-regulatory initiatives are thus recommended, together with incentives by the state to make self-regulation more attractive to the focal organizations [43].

2.3. Research Gap and Research Questions

We recognize the important role of regulation in fostering sustainability [10], but also acknowledge the need for research on how society should be governed in order to promote greater sustainability. Self-regulation has gained importance in terms of implementation efforts [3], but many questions remain regarding the appropriate level and instruments of regulation and self-regulation for sustainability [44]. As a result, a modern approach to sustainability governance appears to reduce the distinction between state-imposed regulations and industry self-regulations. However, the different and pertinent streams of research have not been fully integrated yet; for both practice and research, the interplay of regulation and self-regulation remains a matter of discussion. More specifically, the influence of associations and related organizations on regulation has not fully been investigated yet [45]. We also acknowledge the tight relationship between government and associations, as well as a research gap regarding “the direct influence of interest groups during one of the bureaucracy’s primary venues for policy implementation” [45] (p. 104).

In order to address these research gaps, we investigated the interaction patterns related to sustainability that appear in a mature, highly regulated industry—i.e., the wine industry—which will be further characterized in the following sub-chapter. In response, we seek to explore whether networking by wine industry associations with public institutions affects sustainability outcomes, and specify the role of state-imposed regulation and self-regulation by associations in this context. As a systematic literature review has shown, the wine industry is particularly suitable for research on sustainability [4]. The authors identify one key emerging research question: “under what conditions sustainability happens” [4] (p. 11), and summarize further that “although sustainability issues are affecting the wine industry all over the world, research does not show how to keep the path of such a diffusion” [4] (p. 11).

Accordingly, we address sustainability implementation through regulation and self-regulation in the German wine industry with the following research questions:

• RQ1: Which key actors constitute the organizational field of the German wine industry, and what is their understanding of sustainability?
• RQ2: Which governance patterns can be identified that impact on sustainability in the organizational field of the German wine industry?
• RQ3: What is the role of regulation and self-regulation by key actors for the implementation of sustainability in the organizational field of the German wine industry?

3. Sustainability in the Wine Industry

3.1. State of Research

On a global scale, environmental challenges such as soil erosion and their economic consequences call for dedicated sustainability management in the wine industry [4]. For instance, climate change challenges the established ways in which viticulturists have grown high-quality grapes and produced high-quality wine [46]. Furthermore, the wine industry is confronted by threats such as chemical exposure and the availability of water and energy [47,48,49,50]. As a result, sustainability in the wine industry is a highly relevant issue to the 47 member states of the International Organization of Vine and Wine (OIV) [50]. The OIV defined sustainable viticulture as:

… (a) global strategy on the scale of the grape production and processing systems, incorporating at the same time the economic sustainability of structures and territories, producing quality products, considering requirements of precision in sustainable viticulture, risks to the environment, product safety and consumer health and valuing of heritage, historical, cultural, ecological and aesthetic aspects.

[51,52]

Researching the wine industry is a complex endeavor due to the several steps of value creation, starting with agricultural activities (viticulture), followed by industrial operations and management processes (winery) and the distribution to the customers [50]. Consequently, the investigation of sustainability in the wine industry is not only an interdisciplinary task of agricultural research [49,53] and viticulture but also of management [54] and marketing [55]. Regarding the research approaches, the studies focus on either single winegrowing regions or clusters (e.g., [56] on California), several regions within one country in comparison [57], or cross-sectional surveys across countries [58]. So far, the drivers and practices of sustainability in the wine industries of several countries have been investigated, including the United States [10,59] and New Zealand [57]. Producers as well as consumers of wine are enhancing their understanding of sustainability [60]. Sustainability, for the wine industry, is reflected in environmentally friendly, socially equitable, and economically viable production [61]. From an ecological perspective, winemakers can help ensure long-lasting performance and soil fertility through mutually dependent, complementary, environmentally-compatible measures (i.e., self-regulations) such as the use of organic viticulture, the waste treatment of organic solids, thermal control with a focus in the treatment of pests, and alternative sources of energy [61]. In addition to their immediate economic objectives, winemakers seek great diversity in the native flora and fauna in the ecosystem, using landscape conversion and species protection methods. However, they also struggle with challenges to their water and pesticide usage [57]. From an economic perspective, cooperativism, revenue generation, and the generation of jobs can be mentioned [61]. Sustainability in the field of wine tourism has been proven to be an important driver of the economic development of winegrowing regions [61].

3.2. The German Wine Industry

The globally-rising interest in sustainable wine is reflected in the increasing market share of organic wine [62]. The German wine industry has witnessed a specifically large increase in the demand for organic wine of up to 23.9% of the market share in 2017, which is the globally-leading position [63]. At the same time, the acreage of organic wine in Germany was less than 10% [64], leading to a growing demand for imported organic wine.

Against the background of a long tradition of viticulture in Germany, regulation by agricultural ministries at the federal and state levels plays an important role, and is also embedded within European competition and regulations [64]. Besides a high level of regulation, nonprofit associations represent German winemakers democratically, though with compulsory membership, such that every winemaker must be a member of an association that represents their viticulture region. Other associations, such as organic farming associations, offer voluntary membership for winemakers that meet certain criteria. Considering the various definitions and terms used to refer to associations (e.g., voluntary associations, [65]; pressure groups, [66,67]; interest groups, [45,68]; lobby groups or representative organizations, [69]), we chose to adopt a modified version of the definition of associations as membership-based organizations that engage in activities to achieve specific political goals [70]. This definition emphasizes the ways in which associations can shape government decisions through various political instruments [45,68,71,72,73,74,75,76,77]. Accordingly, industry associations are of potential high relevance in creating sustainable awareness among grape growers and wineries [4,53,56].

4. Methodology

4.1. Mixed Methods Approach

For the empirical study, we used a mixed methods approach [78], following the established recommendations regarding its quality [79]. Better results are possible from combined research designs, because they unite the respective strengths and compensate for the individual weaknesses of individual approaches [80]. However, the main argument for a mixed method approach is that quantitative research can prepare the ground for qualitative research [81].

The data collection spanned several years because of the difficulties in obtaining access to the organizational field. In order to define the organizational field, we first conducted a pre-study. Second, we identified the key actors in the organizational field (RQ1) by means of a social network analysis alongside their relationships and positions within the network of actors [82]. Third, we conducted qualitative interviews with the most central actors in order to analyze the impact and importance of regulation and self-regulation on sustainability in the German wine industry (RQ2, RQ3). This research setting, representing a sequential explanatory design [80], is illustrated in Figure 1.

4.2. Structural Study

4.2.1. Data Collection

In order to establish a comprehensive definition of the organizational field of the German wine industry (as part of RQ1), we collaborated with the German Wine and Sommelier School in Koblenz. As an independent nonprofit institution, it could help us elaborate an extensive list of relevant actors in the German wine industry. Over the course of several meetings, we created a list of more than 100 training institutions, public service providers, and associations, most of which represent their cultivation regions. In the pre-study, we used this initial list in interviews with 16 winemakers (during the international trade fair for wines and spirits, ‘ProWein’) about their relationships with these organizations. The interviews strongly indicated that the list was complete, so we focused on these associations when examining the organizational field, and excluded individual winemakers, who are represented by their compulsory membership in their association.

The final list of 117 organizations provided the basis for our questionnaire, as well as the target group for responses to the e-mailed survey. In order to define which organizations are most influential, we used a roster instrument in our questionnaire [83], such that the degree of interconnection was measured via contact frequency (see Appendix A).

Our intention was to identify all of the institutions, detect any mergers, and exclude potential duplicates so that we could minimize the impact of any such errors on the study results. Ultimately, we received 63 responses. Because social network analysis (SNA) assumes a symmetry of responses, we can interpret the responses as being generalizable to the whole network.

4.2.2. Data Analysis

We conducted a SNA using UCINET 6 and Netdraw visualization software [84] for further data processing, in order to identify the central actors among these organizations. This empirical social research approach describes social structures in the form of networks and analyzes the behavior of the network actors by accounting for their position in the network [83,85,86]. Because of its dual focus on both the structure of social relations and the interactional processes that generate these structures in terms of the content and perception of the network, SNA combines internal and external views, and offers a unique means for mixed methods [87]. Because networks are specific sets of “linkages between a defined set of social actors” [88] (p. 2), but these linkages and social actors can refer to different social entities, the use of a network concept can be effective to acknowledge the aggregate social relations and their social context—that is, the embeddedness of social action [80].

4.3. Qualitative Study

4.3.1. Data Collection

For the qualitative data collection, we selected the sample based on our structural study, which revealed the 12 most central actors in the organizational field. The central actors likely influence the logic of the whole network [89]; thus, we can analyze their subjective perceptions and interpretations of regulation and self-regulation for sustainability. In order to prevent a one-dimensional view and ensure robustness, we also interviewed one regulator on the federal level and another regulator on the state level. One further association was mentioned by virtually every respondent as being very important, although it was not listed as a most central actor by the SNA. Therefore, we contacted it directly and included it in the qualitative study (A1). The 15 interviewees are listed in

Table 1. List of interviews.

Acronym	Type	Year of Foundation	Reply to Social Network Study	Betweenness Centrality
A1	Association	1874	No	n.a.
A2	Association	1913	Yes	49.433
A3	Association	1950	Yes	94.788
A4	Association	1911	Yes	117.333
A5	Association	1948	Yes	225.057
A6	Association	1910	Yes	145.684
OFA1	Organic Farming Association	1985	Yes	71.647
R1	Regulator (Land/state level)	-	No	n.a.
R2	Regulator (Bund/federal level)	-	No	n.a.
TRI1	Research and Teaching Institution	1971 (2013 re-founded)	Yes	174.278
TRI1*	Research and Teaching Institution	1872	Yes	268.644
TRI2	Research and Teaching Institution	unknown	Yes	150.896
TRI3	Research and Teaching Institution	1868	Yes	69.789
TRI4	Research and Teaching Institution	1920	Yes	115.326
WM1	Wine Marketer	1949	Yes	202.976
WM2	Wine Marketer	1961	Yes	116.663

Notes: TRI1 and TRI1* were originally separate institutions, but merged in 2013.

.

In total, we conducted 15 interviews by telephone, most of which lasted between 30 to 60 min. With our clearly-defined focus and specific research questions, we preferred semi-structured over unstructured interviews [90,91]. The questions are based on the preliminary insights. Specifically, the guided questions refer to five categories of issues: (1) the organization and interviewee, (2) the organizational field of the wine industry in Germany, (3) regulation and self-regulation, (4) possible influences, and (5) sustainability. The interviews all concluded with the option for respondents to offer additional comments (see Appendix B for the entire collection of questions).

In order to support a detailed analysis of the interview content, we recorded all of the interviews and transcribed them word for word. For the coding and analysis of these transcriptions, we used MAXQDA software [92]. In order to triangulate our data [93,94], we also conducted extensive online research. Accordingly, we can reinterpret the idiosyncratic impressions and individual statements of the interviewees according to the knowledge we generated through our literature review and other interviews [89], as well as the information available on the websites of the interviewees’ organizations. We compared these data with the relevant laws, regulations and initiatives. Because we found no contradictory information, we relied on all 15 validated interviews in our analysis.

4.3.2. Data Analysis

Qualitative content analysis is well suited for the qualitative part of our study, because it offers a systematic procedure that follows strict rules regarding the order and content of each step in the analysis and interpretation [95]. We treated the text that needed to be analyzed as material with data, which we extracted, processed, and interpreted. Specifically, we performed several steps: we developed a closed category system, separated the text into items for analysis, searched the text for relevant information, and classified the information into categories [95]. For our extraction, we used a category system that we constructed prior to the analyses on the basis of our preliminary theoretical considerations [95], which is detailed in

Table 2. Category system.

Topic (T)	Category (C)	Content-Indicator (I)
T1. Organizational field	C1.1 Organization	I1.1.1. Function
		I1.1.2. Political influence
		I1.1.3. Networking activities
		I1.1.4. Key actor (self-perception)
	C1.2 Wine Industry	I1.2.1. General information
		I1.2.2. Development of the last years
		I1.2.3. Forecast
		I1.2.4. History
		I1.2.5. Relevance of key actors
T2. Regulation	C2.1. General
	C2.2. History
	C2.3. Development in the last years
	C2.4. Forecast
	C2.5. Confrontation with regulation
	C2.6. Regulation is originating from…
	C2.7. Possibilities of influence	I2.7.1. General I2.7.2. Examples
	C2.8. Relevance of key actors	I2.8.1. General I2.8.2. Sustainability
	C2.9. Desired change in regulation	I2.9.1. Yes I2.9.2. No
	C2.10. Sustainability trough regulation	I2.10.1. Rather possible I2.10.2. Rather not possible
	C2.11. Examples of regulation	I2.11.1. Regulation in general I2.11.2. Impulse toward sustainability
T3. Self-Regulation	C3.1. General
	C3.2. History
	C3.3. Development in the last years
	C3.4. Forecast
	C3.5. Relevance of key actors
	C3.6. Sustainability through self-regulation	I3.6.1. Rather possible I3.6.2. Rather not possible I3.11.1. Self-Regulation in general I3.11.2. Impulse toward sustainability
	C3.7. Examples
T4. Sustainability	C4.1. Understanding of sustainability	I4.1.1. General I4.1.2. Social Dimension I4.1.2.1. Generational change I4.1.2.2. Responsible consumption of alcohol I4.1.3. Ecological Dimension I4.1.3.1. Biological diversity I4.1.3.2. Use of herbicides I4.1.4. Economic Dimension I4.1.4.1. To make a living with wine I4.1.4.2. Quality (growing less) I4.2.1. External I4.3.1. Internal
	C4.2. Relation to sustainability
	C4.3. Development of the last years
	C4.4. Forecast

.

5. Findings

5.1. Central Actors in the Organizational Field

The organizational field of the German wine industry consists of 117 educational institutions, public service providers, regulatory institutions and associations, representing their members on regional, state, and federal levels (RQ1). Building on the questionnaire—which measured contact intensity—we created a binary matrix to designate whether any connection between two organizations exists or not. The SNA was conducted based on this binary matrix of inter-organizational contacts. By means of the SNA, the whole network is displayed in Figure 2, with a color-coded representation of the type of organizations. We classified the organizations according to their characteristics, including whether they are research or teaching institutions, wine marketers, organic farming associations, associations, or regulators [6].

In order to understand the flow of resources in a network, centrality represents a critical factor [96]. The degree of centrality is the extent to which more than one logic is core to organizational functioning, such that multiple logics may appear to be equally valid and relevant [12]. Our findings suggest the high centrality of educational institutions and the low centrality of public regulators [97]. At the intersection of all three criteria (indegree, outdegree, and betweenness centrality [98,99], we identified 12 main actors in the network, and we included an additional central actor which did not appear in the SNA, but was identified as being important by others while conducting the interviews for the qualitative study, along with the two regulators. By interviewing these organizations whose centrality indicates that they can control the flow of resources within the organizational field, we expect to derive pertinent implications for the development of the German wine industry.

5.2. Understanding of Sustainability in the German Wine Industry

Regarding the second part of RQ1, most of our interview partners had a clear concept of sustainability based on the triple bottom line; some even defined it directly in relation to wine culture:

“For me personally, sustainability represents not only an ecological aspect but also the permanent crop linked to viticulture and usually long-standing businesses. Sustainability also means a view toward continuing generations, from both an ecological and an economical point of view. Therefore, environmental aspects shall not be neglected, and the production shall be brought under control, consistent with relevant laws. At the same time, businesses shall be developed in such a way that they remain economically stable. Thereby, businesses could be handed down to next generations.”

(A4)

Some respondents also claimed that sustainability was inherent to wine culture:

“In viticulture, sustainability is taken for granted, because the ones that do not maintain the soil will not be able to pass it on to the next generation.”

(A6)

When we asked for a more differentiated definition, we received various examples of the ecological, social, and economic dimensions (see Table 2). Regarding the social dimension of sustainability (Content-Indicator I4.1.2), generational issues, labor laws, and fair remuneration, as well as responsible wine consumption, emerged as relevant topics. For the ecological dimension (Content-Indicator I4.1.3), energy-saving systems, pesticide-free viniculture, carbon footprints, and water usage were mentioned. Finally, the economic dimension (Content-Indicator I.4.1.4) considers the economic survival of wine producers alongside the quality enhancement of the wine. As with many industries, the challenge here seems to be to combine the perspective of a single wine producer with the whole economy:

“Many experts are arguing for instance about the economic pillar, debating which perspective to use. Should one choose the microeconomic figures like debt ratio or debt burden of a company or something like that? Or should one rather consider the macroeconomic figures: What value does the economic activity of an actor add to society? If we do not use artificial fertilizer for example, we protect waters. Thereby we minimize the problems regarding sewage plants, and there we are at the keyword: drinking water and health. These are costs that one could offset and which play a tremendously important role for sustainability, definitely more important than a debt ratio in a company.”

(OFA1)

Although sustainability has thus become a prominent topic for the German wine industry, sparking concern in all of our interviewees, we found no holistic sustainability concept:

“There are different projects that make it their priority to force sustainability, but we do not have a proper German-wide implementation concept in this sector. However, I already consider this as a key point. Thereby the individual institutions must work with each other much more intensively.”

(TRI1)

5.3. Patterns of Regulation and Self-Regulation to Enhance Sustainability

In order to analyze the impact of regulation and self-regulation by key actors on sustainability in the German wine industry (RQ2), we found a mixture of command-and-control regulatory mechanisms and cooperative behavior between the government and the wine industry. Our data suggest that a simple dichotomy between regulation and self-regulation is not enough. Instead, we propose three patterns which are jointly depicted in Figure 3: regulation, proactive self-regulation, and reactive self-regulation. In the following sub-chapters, we will elaborate on the three patterns in detail, first by highlighting the respective institutional drivers and impact mechanisms, followed by a summarized overview on the impacts on sustainability-related outcomes (

Table 3. Regulation.

Impact Mechanism	Sustainability Dimension	Sustainability-Related Outcomes	Exemplary Quotes
Formulation of regulations	Ecological	EG-Eco-Regulation	“The only pillar that was legitimately established in terms of sustainability is the ecological pillar, for example in form of EG-Eco-Regulation. There, we have reliable rules, which apply to all farmers. If they want to produce organically then they must adhere to the EG-Eco-Regulation.” (OFA1)
	Ecological	Water framework directive	“So let’s take the Water Framework Directive, shall we? That is another EU regulation. As you can see, we keep coming back to Brussels.” (A4)
Incentives for sustainability	Ecological	Organic wine growing	“I think the state can at best create incentives (…) But no winegrower will convert his business just because there are subsidies. The subsidies are good, however, in order to make a certain balance, and it might make it easier for one or the other to convert to organic viticulture.” (WM1)
	Ecological	Regulations on maximum yields per hectare	“In 1990, the regulation on maximum yields per hectare was introduced and this has led to an increase in quality, because the high quantities produce less quality. This has meant that yield fluctuations have been reduced, because if you let the yield run, there will be a great deal in one year and the vines will react naturally and then produce much less in the following year. And if you then reduce the naturally high yields, you will have the effect that in the next year the minus will not be so strong. So, through this legal limitation of quantities, the regulation on maximum yield per hectare, the yields have become more balanced.” (TRI4)
	Ecological	National action plan for the sustainable use of plant protection products	“What other regulations do we have? The national plan of action for plant protection issued by the German government.” (TRI4)
	Ecological	Pheromone mating disruption method	“Well, if I can just stick with this pheromone confusing method, with these biotechnical procedures. The federal state government is providing a grant of €100 per hectare, so that it can basically be said that Baden has been provided with this biotechnological measure throughout the state. And this is a novelty when compared with other wine-growing regions. Basically, these are impulses where we can provide incentives, where people say that these are not huge sums of money, yes, but where there is a broad effect of sustainability or ecologisation in the end.” (A2)
	Economical	Wealth of winemakers	“I believe that regulation, the strong regulation we have in the wine industry through legislation and directives, has also contributed to the success of the wine industry. But this must also be seen in the light of the fact that producers are doing relatively well at the moment. If you go back 12 to 14 years, everyone has only had a third of their income.” (A5)

,

Table 4. Proactive self-regulation.

Impact Mechanism	Sustainability Dimension	Sustainability-Related Outcomes	Exemplary Quotes
Individual values of winegrowers	Sustainability in general	Awareness of sustainability	“They were all convinced that they were doing the right thing, and the demand for sustainable production was not there yet. The demand has only been created by creating awareness.” (A6)
	Sustainability in general	Self-regulation going beyond regulation	“I don’t think regulation is a problem for our winegrowers, because our rules are much tighter than those set by the state. (…) Our self-regulation goes beyond that.” (A6)
Anticipation of regulation	Social	Moderate wine consumption (prevention program)	“[In] the EU-wide initiative “Wine in Moderation” we take the leading role from Germany for the entire EU which includes a Wine Information Council that informs people about the risks of wine consumption and releases wine brochures. This is a self-commitment of the wine and alcohol industry to prevent advertising prohibitions.” (WM1) “…and this will also become an important topic, self-promoting a moderate wine consumption as a company from the wine-growing sector. If we look at the developments regarding cigarettes and cigarettes advertising in Brussels in the last years, we can observe massive intervention from the political side. These could as well affect our general alcohol industry in the medium or long term or our wine sector in particular.” (A5)
Self-regulation influences regulation	Ecological	Directive for organic wine production	“Since 1985, we have also had guidelines for the vinification facilities, which has only existed at EU level since the harvest in 2012. This means that before 2012 there was only wine made from organically produced grapes and since the harvest in 2012 there has actually been organic wine, which Ecovin has been producing since 1985.” (OFA1)

and

Table 5. Reactive self-regulation.

Impact Mechanism	Sustainability Dimension	Sustainability-Related Outcomes	Exemplary Quotes
Incentives by State or EU	Ecological and social	Reduction of chemical insecticides	“Talking about the pheromone mating disruption method, the state government offers a subvention of 100 € per hectare…. These are stimuli that … evoke a sustainable or ecological effect across the country.” (A2)
Resources provided by wine marketers	Ecological	Instruments enabling the documentation of sustainability-related outcomes	“We want to give the winegrowers an instrument to measure their progress in sustainability and at the same time fulfil their documentation obligations. To this end, we are currently cooperating with the Service Center, with the research institutes, with all those active in the fields.” (WM3)
Enabling sustainability	Economical	Sustainability-related innovations	“This is what we have been doing for three years now. In conjunction with the service center, we also reward the innovations that make a major contribution to sustainable management.” (WM3)

).

5.4. Pattern of Regulation

Within the regulation pattern, four groups of institutions were identified as institutional drivers of public regulation toward sustainability-related outcomes, i.e., teaching and research institutions, wine marketers, and associations.

Because of their diverse network and through their consulting activities, teaching and research institutions have a certain impact on regulation.

“There is the Federal Committee for Wine Research, this Federal Committee is the direct link between the Federal Ministry and the representatives of the Laender, who are also involved, and the scientific community, which then says that we have to change this and that. We in Germany are already quite well positioned with this interaction, also via platforms, between practice, the profession and science and teaching or training institutions.”

(TR1)

As an example of how they were able to influence regulation, TRI4 mentions the use of pieces of oak wood to flavor the wine:

“In the EU, the use of pieces of oak wood for flavoring the wine was approved four, five years ago and we then influenced the approval in Germany with our experiments. That it is only approved for quality wines, but not for Prädikatswein [special quality wine].”

(TRI4)

In a similar manner, wine marketers also have an impact on regulation. Even though they do not influence regulation directly, they advise and consult public regulators.

“Our managing director is of course active in various committees where such decisions are discussed. Let me say that the winegrowers’ association is the political body in the wine industry and we then of course coordinate and recouple this. But we are more advising, but not directly influencing.”

(WM1)

“These are, of course, lengthy processes. For sure, we have influenced certain things. Our voices are heard, but you know what it is like then, until it is somehow implemented, years go by.”

(WM1)

Associations influence political activity through two impact mechanisms: lobbying and consulting activities. The process of political decision making might thus be described as follows:

“For example, if we refer to the EU-ECO-Regulation in general, it is currently being discussed if it should be transformed completely. Keyword: “total revision.” Then it passes through various boards until there is finally some unofficial draft or concept. Someday, it is made public as a subject of discussion. If there are any umbrella associations, they take it in hand and analyze it … and look at the regulation, on how it should be realized or applicable according to the ideas of the makers in Brussels. Then the members like us receive the draft with the request to pick the part that is important for each one and to accordingly annotate it; in our case viticulture, oenology. We look at that part with our specialists, we annotate it, and send it back. They collect it from all other associations.… It makes sense, when the people realize it, which also understand it.… Then it is all being collected, annotated and sent back to Brussels. The German ministries are also involved in this process.”

(OFA1)

The federal ministries are the most important targets of associational influence in the German wine industry. The associations work to act on the political decision-making process as early as possible in order to defend their claims. The timing is particularly relevant, and many have been successful in influencing different forms of regulation:

“Yes, we have been able to influence some regulation; we managed to do so together with many other European producer countries in the field of viticulture. The original plan of the EU was to let the planting rules expire completely by the end of 2015. This means a complete deregulation of the wine market and an opening for replanting in Europe at every site, where viticulture is possible. This is not what we wanted, because we know exactly how the wine market works and which wine quantities are saleable in Europe. In addition, we managed: a complete abolition was not realized but rather a transformation into a new system.”

(A4)

We found evidence in our interviews that associations are involved in European directives because of their expertise, such as:

“Yes, we were involved in European directives regarding organic wine because of the expertise we have in this field or rather the expertise we have been having for decades. It is not wrong, if one consults people, which have a longstanding experience in the field.”

(OFA1)

In addition to formal regulations, we found evidence that public regulators also create incentives for ecological and economical sustainability. We further summarize the role of regulation for enhancing sustainability in the German wine industry in Table 3, with a focus on the different impact mechanisms, sustainability dimensions, sustainability-related outcomes, and respective exemplary quotes.

5.5. Pattern of Proactive Self-Regulation

We found that the pattern of self-regulation can be proactive, and can be exerted by associations, organic farming associations, and wine marketers:

“Building on the individual values of winegrowers for sustainability, their associations act as membership organizations who express these values and impose either proactive self-regulation for sustainability wine growing practices or create awareness for this topic”

(A6)

Proactive self-regulation might also arise when associations anticipate regulation. For example, our interviewees frequently mentioned the EU nonprofit organization ‘Wine in Moderation/Art de Vivre’ (WIM). It was founded by the European wine sector in 2011 to coordinate the European and international implementation and development of the WIM Program, with the aim to secure responsible and moderate wine consumption patterns as social and cultural norms [100].

Proactively self-imposed standards can also transform into regulations over time. For example, OFA1 established an environmental standard that was later used as a basis for an EU regulation:

“We have been actively involved in shaping the EC Eco-Regulation and are now proud that what is valid throughout Europe comes largely from us.”

(OFA 1)

“The EU Organic Wine Directive considers ecological viticulture. And it is certainly the case that standards that the associations have set themselves have been adopted to a certain extent in this new EU directive.”

(WM1)

We further summarize the role of proactive self-regulation for enhancing sustainability in the German wine industry in Table 4, with a focus on the different impact mechanisms, sustainability dimensions, sustainability-related outcomes, and respective exemplary quotes.

5.6. Pattern of Reactive Self-Regulation

As our analysis shows, self-regulation can also be reactive, so that, in this pattern, associations respond to external impulses, including incentives provided by the Bund (federal level), the Land (state level), or the European Union.

Society might foster sustainability in the German wine industry by expressing interest in the actions of the wine makers. The influence of society appeared in the following quote:

“The winemakers have tremendously transformed their production into organic forms, because the consumer—the cyclist or the hiker through the vineyards—constantly asks these kind of questions. The winemakers then must explain why they spray, what about insecticides, herbicides, and nitrogen in water. These are all social relevant subjects, which confront the winemaker in direct contacts with the consumer or the tourist.”

(TRI2)

Consumer pressures also evoke reactive self-regulation toward sustainability. Consumers’ opinions thus impose powerful influences on the behavior of organizations:

“The winemakers are open-minded, go to exhibitions, to wine tours and listen a lot and through this feedback from consumers there is a mature conception to think of a long-term and sustainable development.”

(TRI2)

“So overall for me it is beyond any reasonable doubt that the winemaker profession made significant steps toward an ecological course. Sustainability wasn’t felt like a threat but more like a chance and this conception was pushed through consumers.”

(TRI2)

However, the media were mentioned only once as a driver of reactive self-regulation; we still include it in the overview for a more complete picture:

“The winemakers are constantly confronted with sustainability. In many newspaper interviews they are asked how they deal with this topic.”

(A6)

Competitors are a further important source of pressure to pursue sustainability. Thus, one organization (WM3) started to adopt sustainability measures in response to the international competition they identified after attending an international wine fair. Noting the sustainability efforts undertaken by wineries in Austria, California, New Zealand, and South Africa, they realized that, although their standards were quite high, they were not communicating well about it. Therefore, they organized a sustainability conference for the region, and developed a sustainability program with well-defined indicators of ecological, social and economic dimensions:

“We have just seen how our colleagues in Austria have thrown themselves into the matter with a great deal of verve—sustainability, sustainability, sustainability is all they have been saying in recent months. And that’s why we’re staying on top of the issue. It is important, and we also have a colleague here with us in the wine advertising in the circle of employees, who was also assigned in this area, because we have to take care of this topic ourselves with good people and to be able to give these impulses again and again into the region.”

(WM3)

We further summarize the role of reactive self-regulation for enhancing sustainability in the German wine industry in Table 5, with a focus on the different impact mechanisms, sustainability dimensions, sustainability-related outcomes, and respective exemplary quotes.

5.7. Importance of Regulation and Self-regulation

In order to answer RQ3 on the relative importance of regulation and self-regulation, we specifically addressed this issue in the interviews. When asked if they perceived regulation as an adequate instrument to enforce sustainability, some interviewees disagreed (TRI2). Several actors perceive the level of traditional forms of regulation as being quite high, such that they would prefer less regulation in order to reduce the bureaucracy and time-consuming documentation duties (TRI1). However, a few considered the level of regulation appropriate, noting the need for some regulation to influence the organizational field (TRI2). In fact, the state-level regulator perceived some demand for even stronger regulations (R2). Furthermore, according to this regulator, the state ministry functions mainly as a moderator, and only to a limited extent as an initiator of regulations, most of which come from the EU level (R2). On the federal level, the regulator perceives regulation as a framework which supports the production of high-quality wine (R1). Even though, on a state level, regulations and a legal foundation appear to be highly desired, regulation on the EU level is often rejected by the key actors (A2, A3, A5, A6, WM1, WM3, TRI1, TRI2, TR4, R1, R2) in this organizational field, and is perceived as insufficiently differentiated to apply to the conditions that face wineries all over Germany. A standardized regulation for all countries, regardless of their location in the EU, cannot do justice to the variety of conditions. However, the process of EU regulation mostly involves striving for compromises (OFA1).

We asked our interviewees if they thought self-regulation could lead to sustainability in the wine industry. One explanation that emerged was the necessity of self-regulation due to relevant soft factors that either cannot be regulated or which the regulators do not feel obliged to regulate (R1). For several respondents, it was the organic farming associations that promote sustainability the most in the German wine industry (WM1, A6).

6. Discussion

6.1. Theoretical Implications

On the way to enhancing sustainability, individual drivers—such as environmental values, managerial attitudes, subjective norms, and employee welfare—can be distinguished from institutional drivers, including compliance with current regulations, preemption of future regulations, and community groups [10,57]. In relation to community groups, associations, suppliers, and customers constitute “local institutional networks” [10] (p. 96), which might also function as institutional drivers. In this study, we focused on the organizational field of the wine industry in Germany and the interplay of institutional drivers. With a sequential explanatory design involving both an SNA and a qualitative analysis of the key actors in the field, we learned about the central actors and their understanding of sustainability, and derived an overview of three patterns of sustainability governance.

The overview of the three patterns of sustainability governance extends beyond the simple dichotomy of regulation versus self-regulation. Traditional forms of state regulation are challenged by their embeddedness in European legislative bodies, such that member states merely translate European law into their national laws. The pattern of regulation in the German wine sector is driven by the European Union, the federal government, or the state government, such as the EU water framework directive, which was adopted in 2000. Regulation—in form of regulatory changes—may persuade social and medium sized enterprises, like wineries, to adopt environmental practices [101]. The need for international compromise thus tends to lead to less ambitious sustainability regulations on the European level, and efforts to regulate sustainability on the national level might even conflict with European legislation. For example, in the early EU agenda-setting phases, lobbying resources likely achieve greater returns than those allocated later [102]. Once bills have passed the drafting stage, they are often difficult to change. Therefore, associations seek to maintain stable, long-term relationships with the executive branch, especially in the form of links and institutionalized forms of participation on advisory boards and commissions [103]. Due to various interactions of associations and officials, the EU system tends to lean toward “policy compromises that allow everyone to see at least some of their goals realized” [104] (p. 204). This pursuit of compromises and long-term relationships [103] can pay off for the associations, as has been shown by the interviews in this study. Due to their long tradition and publicly-accepted positions, the most central and powerful associations also are very proficient in fulfilling their role as industry representatives. Governments respond to associations for two reasons: “First, interest group comments provide a new source of information and expertise to the bureaucracy during the rulemaking process. Second, the bureaucracy can reduce future court challenges by responding to the concerns expressed within comments.” [45] (p. 104). Whereas prior research into the influence of associations on agency rulemaking came to mixed conclusions [105,106,107,108], our study shows that even some of the younger associations explicitly and successfully drive sustainability in the wine industry on both the national and European levels.

When it comes to self-regulation by the industry, we identified both proactive and reactive approaches. As shown by the literature, proactive self-regulation can express the individual values of the owner or association to implement sustainability [4,57,109]. As our findings show, self-regulation is more than the mere intent to avoid regulation. This intent is only one form of self-regulation. Reactive self-regulation responds to external pressures from society, consumers, competitors, and the media. Because consumers are becoming more and more aware of sustainability [110], wineries have to respond to the growing demand for solid agricultural production practices [111]. “This is due in part to the fact that the typical wine consumer is well educated and affluent” [111] (p. 698). The market for organic and biodynamic wines is also a result of consumers’ pressure [55]. In some countries, organic wine even moved from a niche to a mainstream position [4]. In such a strong environment of institutional drivers for sustainability, our data suggests the appropriateness of substituting sanctioning mechanisms [38] with reactive self-regulation and stakeholder pressure. In a fragmented industry like the wine industry, competitors are an important institutional driver of pressure to pursue environmental practices [112,113]. An orientation of competitors toward sustainability can even encourage a me-too mechanism, resulting in a dispersion of sustainable practices in the competitive environment [4,50]. Interestingly, associations representing winegrowers and wine marketers supporting their sales may both be considered as institutional drivers toward sustainability in the German wine industry. Taken together, our study contributes to the further empirical investigation of the often-neglected self-regulatory institutions [114] by highlighting the range of impact mechanisms on regulation, proactive self-regulation, and reactive self-regulation.

6.2. Practical Implications

The dual patterns of proactive and reactive self-regulation, in combination with the strong role of associations, might lead to inertia in the organizational field which induces a time lag in the transition toward sustainability. For instance, in February 2021, a potential European regulation of shock pictures on alcoholic beverages as an outcome of Europe’s Beating Cancer Plan was discussed in Germany, which immediately led to a counterstatement by the EU commission’s representation [115,116]. Still, we consider the involvement of societal groups and associations to be necessary to prevent regulatory failure.

On the organizational level, the rather monopolistic role of the teaching and research institution TRI1 is likely to cause normative isomorphism in the organizational field. Sustainability is crucial in its activities, so we expect the German wine industry to grow more receptive to sustainability as a guiding principle. The pressures exerted by society and competitors, instead, might be interpreted as coercive isomorphism. The challenge for an economic perspective on sustainability will be to maintain the regional character of the wine industry in Germany in the ongoing effort to prevent mimetic isomorphism despite these isomorphic trends.

Building on the empirical findings, regulators should take the pluralistic structure of the organizational field into account when developing regulations pertaining to sustainability practices. Embedding regulatory initiatives within a clear commitment to and strategy for sustainability is necessary in order to transform the industry as a whole. More specifically, regulators should involve the associations with their expertise and connection to constituencies, but it would also be prudent to distinguish proactive self-regulation which is avoiding regulation from proactive self-regulation which exceeds current regulations to express the winegrowers’ striving for sustainability. In order to strike a balance between the dynamics within the organizational field and the democratic participation of smaller regions or members of the organizational field, regulators cannot limit their attention only to the most central actors.

For associations, early intervention efforts are most likely to be effective, so they need close, stable relations with other actors, especially regulators, in the organizational field. The associations should try to understand how potential regulations will work and react to or anticipate the implications. In relation to their members, associations should communicate explicitly the ways in which they fulfill their representative roles through proactive and reactive self-regulation. This latter point is particularly important considering the rising questions about the value added associations with mandatory membership [117,118]. With an increasing commitment of winegrowers to sustainability, associations should be responsive to their values, and should express their power accordingly in order to act as their representatives.

Finally, for the winegrowers affected by regulations, we recommend gaining a clear understanding of how regulation works in order to react to or anticipate the outcomes. The different patterns of self-regulation we describe may help wineries, especially small and medium-sized enterprises, to better understand the benefits (and potential risks) of being represented by powerful associations.

7. Limitations and Further Research Directions

Our study suffers several limitations that provide avenues for further research. Our goal was to depict the relationship between regulatory and self-regulatory structures in an organizational field, and to identify how they might be used to foster sustainability. With our study of the organizational field of the German wine industry, we gained a clear focus on this industry and region, which implies a threat of low generalizability. We hope that further research undertakes a comparison of the wine industries of several countries.

Because we conducted the interviews in 2014, several new sustainability frameworks have been introduced which also impact the wine industry. First and foremost, the sustainable development goals were introduced in 2015 by the United Nations [119], with meaningful impact on many areas of importance for agriculture and winegrowers. On the level of the European Union, three policies can be identified in the recent years that are likely to impact on the sustainability of the wine industry in Europe: the EU Common Agricultural Policy, the EU Wine Policy, and the European Green Deal [120]. The European Wine industries are expected to innovate for more environmentally-friendly practices, thereby satisfying the growing demand for sustainable wine [120]. Future research could integrate the current sustainability frameworks into observations of sustainability governance.

We focused on the most central actors because of their likely impact on the organizational field. It also might be interesting to consider peripheral actors, even if they do not know how to exert their influence. The German wine industry is characterized by many regulations spanning the EU, state and federal levels, such that assessments of a younger, less-regulated organizational field might offer further insight regarding our findings. Finally, we recommend the continued use of dynamic SNA to reveal the potential relationships between patterns and the networks in which they appear.