We analyse factors influencing the technical inefficiency of housewives groups in northern Thailand and test for the productivity effects of vertical strategic alliances. Technical efficiency gains could be reaped by housewives groups joining vertical strategic alliances, with higher efficiency gains at higher levels of alliance. However, no technological gains were evident from group membership of vertical alliances. No evidence of scope economies was found while decreasing returns to scale are reported, suggesting that housewives groups would need to adopt more industrial food processing modes to escape scale diseconomies. Such a move would have ramifications for their financial and social structure.