The paper has three basic objectives: (1) to discuss and analyze the subtleties of ranking wines in blind tastings, (2) to analyze the degree of agreement or disagreement among the tasters (judges) and (3) to shed some light on the problem of identifying the wines and to determine when the identifications of the judges might be called statistically significant. The first issue utilizes the rank sums or the related measure, “votes against,” and discusses the appropriateness of a statistical test introduced by Kramer. The second introduces Kendall's W coefficient of concordance and discusses some other, related measures. The third derives the finite sample distribution of the number of correct identifications under the null hypothesis of random identifications, from which critical values can be obtained, both for the case in which each wine has to be identified exactly and the case in which there is a small number of different types of wine that have to be identified. (JEL Classification numbers: C12, C15, C49, C59)

This article documents how the COVID-19 crisis has affected the drinking behavior of Latin European wine consumers. Using a large online survey conducted during the first lockdown in France, Italy, Portugal, and Spain (n = 7,324 individuals), we reconstruct the purchasing and consumption patterns of the respondents. The number of people who maintained their wine consumption frequency is significantly higher than those who increased or decreased their consumption. Wine consumption frequency held up better than other types of alcohol (beer and spirits). We analyze heterogeneities among countries and individuals by employing the Marascuilo procedure and an ordered logit model. The latter identifies the impact of demographic, commercial, and psychosocial factors on wine consumption frequency. The results shed light on changes in wine consumer behavior during the first lockdown and consider possible post-lockdown trends that could be useful to industry players. (JEL Classifications: D5, L66, Q1)

We empirically examine the relationship between price and willingness to pay (WTP) for wines by conducting a wine-tasting experiment with a manipulation of price similar to that used by Plassman et al. (2008); that is, with the same wines being presented at different prices. We find that for non-expert wine consumers a complex interaction exists between wine appreciation, price and WTP. The key conclusions from the study are that for non-expert wine consumers (1) there is no relationship between intrinsic wine character and enjoyment (individuals rated the same wines quite differently), and (2) price influences both appreciation of wine and WTP, but the latter more strongly. Buying decisions are determined by consumer surplus (the difference between WTP and price), and yet, for non-expert wine drinkers, WTP is itself strongly influenced by price. This complex interaction between the factors that determine buying behavior has strategic implications for competitors in the wine industry. We suggest an understanding of the relationship between WTP and price can be used to shed light on the crisis recently experienced by the Australian wine industry. (JEL Classifications: C91, D03, M30)

This paper uses a large longitudinal database (nearly 6,000 observations) of all cabernet sauvignon wines rated by Wine Spectator from 1970 to 2004 in the Napa Valley region of California to investigate whether a quality-weather relationship and a price-weather relationship exist and, if so, whether they occur in a linear, quadratic, or log-linear fashion. The paper examines three different models of wine rating and wine prices to study the effect of weather variations. The results suggest that the weather affects both quality and wine prices, but the results are much stronger for prices than for ratings. A log-linear model can explain nearly 92 percent of the variation in wine prices, but only about 28 percent of the variation in wine ratings. (JEL Classification: C23, Q54)

Two series of Vickrey auctions have been performed to assess the effect of packaging information (bottle and label) on the reservation prices of ordinary consumers for five brut non-vintage Champagnes. As in other studies on wine tasting, packaging information is found to explain much more of the variation in willingness to pay than sensory information. Participants are unable, or unwilling, to put different values on the Champagnes after blind tasting, but significant differences in reservation prices appear when labels are disclosed. Detailed analysis of choices reveals a large heterogeneity in individual behaviors and valuations of the Champagnes included in this study. (JEL Classification: C91, D12)

This article provides an empirical case study of the impacts of the COVID-19 pandemic on global beverage markets, particularly the wine sector. Both international trade and domestic sales have been adversely affected by temporary shifts away from on-premise sales by social distancing measures and self-isolation that led to the closure of restaurants, bars, and clubs, plus declines in international travel and tourism. Partly offsetting this has been a boost to off-premise and direct e-commerce sales. We first estimate those impacts in 2020 and their expected partial recovery in 2021 using a new model of global beverage markets. Further recent disruption to the global wine trade has been the imposition by China in late 2020 of prohibitive tariffs on its imports of bottled wine from Australia. Its diversionary and trade-reducing effects are compared with those due to COVID-19. (JEL Classifications: C63, D12, F14, F17, Q17)

The former Soviet republic of Georgia is reputedly the cradle of wine and has enjoyed at least 8,000 vintages. It has also been a major supplier of wine to Russia for at least 200 years, but to few other countries. In 2006, however, Russia imposed a ban on beverage imports from Georgia. Since then this relatively poor country, in which nearly half the population is rural and most farmers have a vineyard, has been seeking to develop new export markets for its wine. This paper assesses the potential for growth in Georgia's wine production and exports. It then outlines ways to addresses the challenges involved in trying to realize that potential, drawing on the experience of other countries that have rapidly expanded their wine exports in the past two decades. Implications for policy are drawn, particularly for ensuring that poverty is reduced as exports expand and the economy grows. (JEL Classifications: F14, F15, F54, Q17)

The United Kingdom has accounted for a major share of the world's wine imports for centuries, and wine accounts for more than one-third of U.K. alcohol consumption. It is therefore not surprising that suppliers of those imports and U.K. wine consumers, producers, traders, distributors, and retailers are focusing on what the United Kingdom's planned withdrawal from the European Union (Brexit) might mean for them. In this paper, a model of the world's wine markets is used to project those markets to 2025 without, and then with, the occurrence of Brexit. The Brexit scenarios involve adjustment not just to U.K. and EU27 (the countries remaining in the European Union) bilateral tariffs but also to assumed changes to the United Kingdom's income growth and currency. The relative importance of each of these three components of the initial shock are reported, as are impacts on bilateral wine-trade values and volumes for still and sparkling wines. The results suggest that the impact outside the United Kingdom will be minor compared with other developments in the world's wine markets. Inside the United Kingdom, however, the effect of Brexit on incomes and the British pound are likely to have nontrivial initial impacts on the domestic wine market and to be far more consequential than the direct impact of changes in bilateral tariffs. (JEL Classifications: F15, F14, F13)

The value of expert opinion for establishing prices in the Bordeaux futures market is analyzed. The expert opinions examined are the wine quality ratings provided by two of the world's foremost wine experts, Robert Parker and Jancis Robinson, for more than 1,700 red Bordeaux wines over the period 2004–2012. The results show that the experts' ratings have both a statistically and practically significant impact on prices after controlling for the effects of other known determinants of price. Thus, expert opinion has significant value in this setting. The results further show that although Parker's impact on prices is significantly greater than Robinson's, combining the quality ratings of both experts has a significantly greater impact than Parker's ratings alone. As hypothesized, the strength of the results differs for wines produced in different regions of Bordeaux because of differences in the availability of other quality-related information. All results are robust to several alternative sample specifications and other research design choices. (JEL Classifications: C52, G13, L11, L15, M21)

Are wine alcohol labels accurate? If not, why? We explore the high and rising alcohol content of wine and examine incentives for false labeling, including the roles of climate, evolving consumer preferences, and expert ratings. We draw on international time-series data from a large number of countries that experienced different patterns of climate change and influences of policy and demand shifts. We find systematic patterns that suggest that rising wine alcohol content may be a nuisance by-product of producer responses to perceived market preferences for wines having more-intense flavours, possibly in conjunction with evolving climate. (JEL Classifications: D22, L15, L66, Q18, Q54).

This article tests the stability of the main hedonic wine price coefficients over time. We draw on an extensive literature review to identify the most frequently used methodology and define a standard hedonic model. We estimate this model on monthly subsamples of a worldwide auction database of the most commonly exchanged fine wines. This provides, for each attribute, a monthly time series of hedonic coefficients time series data from 2003 to 2014. Using a multivariate autoregressive model, we then study the stability of these coefficients over time and test the existence of structural or cyclical changes related to fluctuations in general price levels. We find that most hedonic coefficients are variable and either exhibit structural or cyclical variations over time. These findings shed doubt on the relevance of both short- and long-run hedonic estimations. (JEL Classifications: C13, C22, D44, G11)

We develop a simple model of the effects of reputation on prices. An increasing fraction of consumers who are “naive” (less informed about quality) results in a stronger sensitivity of prices to ratings of quality. We then argue that this may be a factor in price dynamics for goods that become more widely traded as a result of globalization. We then provide some empirical analysis of these ideas using data on prices and Robert Parker's ratings of wines. Wine prices are strongly related to ratings, and even more so for higher quality wine categories. In addition, changes in Parker ratings for the same wine result in large price changes. Price elasticities with respect to ratings have risen dramatically since 1993. One plausible explanation for this is the growing globalization of the fine wine market, which increases the prevalence of naive wine consumers. (JEL Classification: D8, F1, L1, Q1)

In 2008, the European Union (EU) voted to liberalize its system of planting rights, which has strictly regulated vine plantings in the EU. However, after an intense lobbying campaign, the liberalization of the planting rights system was overturned in 2013, and new regulations could create an even more restrictive system. European wine associations have complained about the detrimental effects of the new regulations. There is a precedent in history. In 1726, the French political philosopher and landowner Montesquieu complained to the French king about the prohibition on planting new vines. Montesquieu was not successful in his demands to remove the system of planting rights. Old and recent history suggests that political forces against liberalization of planting rights are very strong. Only the French Revolution in 1789 led to a fundamental liberalization of planting rights. The “liberal period” of the nineteenth century was sustained by the combination of the French Revolution's liberal ideology, the thirst of Napoleon's armies for wine, and diseases that wiped out most of the French vineyards.

That said, in the past and the present, enforcement of planting rights is a major problem. In fact, despite the official restrictions, Montesquieu managed to plant his vines, allowing him to become a successful wine producer and merchant, to travel, and to spend time thinking, discussing, and ultimately writing up his ideas that influenced much of the Western world's constitutions. (JEL Classifications: K23, L51, N43, N54, Q18)

Rates of alcohol taxation, and the types of tax instruments used, vary enormously between countries and have tended to rise in recent times. Within each country, they also vary between beverages and often between qualities and styles of each beverage. This article computes consumer tax equivalents in U.S. dollars per litre of alcohol and as percentages of wholesale prices of representative beverages for 42 high- and middle-income countries. That allows comparisons across countries of taxes not just for each product on its own, but also relative to those for other alcoholic beverages. The wide dispersion of rates and differences in tax instruments across countries and products suggest differing strengths of health and welfare lobbyists and industry groups in influencing government decision-making. (JEL Classifications: D12, D62, E62, H23, I18, P46)

This survey investigates the inequality-fine wine imports nexus. To this end, the study employs cointegration techniques to analyze two panel datasets, one of which will analyze data from 12 countries between 1871 and 2018, and another that analyzes data from 66 countries between 1995 and 2017. Estimations indicate that income inequality leads to more fine wine imports in the long run. Changes in income have only a short-term effect on fine wine imports. Nonlinear autoregressive distributed lag (NARDL) estimators reveal an asymmetric long-run relationship between income inequality and fine wine imports in the cases of Argentina and the United States. (JEL Classifications: C19, D01, D12, D31, L66)

While many studies have evaluated consumer demand for local foods, fewer studies have focused on the mechanism that has created the positive willingness-to-pay for local foods. This article compares the role of geographic distance and attachment value in consumer preferences for locally produced hard cider. Consumer valuations are estimated via a “branded” discrete choice experiment where the respondents chose between an in-state hard cider, an out-of-state hard cider, and a no buy option. Our measure of travel distance is based on the optimal driving route between each consumer's GPS location and the locations of the cideries while our attachment value measure is based on social capital theory. This allows us to analyze individual-specific travel distance heterogeneity in consumer choice as it relates to attachment value. Based on a latent class logit model estimated from a discrete choice experiment with 441 participants, we show that attachment value is higher for a cider produced within the state than for a cider produced outside the state. Furthermore, we show that increases in attachment value increase demand for locally produced hard cider more than an equal increase in attachment value for non-locally produced hard cider. Our findings are consistent with “local” preferences based on geopolitical boundaries (e.g., the state of Michigan) and not distance. (JEL Classifications: B55, M3, Q13, C83)

In this paper, we study if the leading French gastronomic guidebook, the “Guide Rouge Michelin,” only rates the quality of food, as it claims, or if it also considers environmental variables when attributing stars. We then check how Michelin ratings affect the market, and more specifically, the price charged by restaurants. Using some simple econometric techniques, we find that a small improvement in environment boosts the probability of receiving Michelin stars. Since we also find that a Michelin star is associated to a high price premium stuck (independently of the quality of food), we conclude that expertise induces distortions in the market (JEL classification: D4, L15, L66).

This paper explores empirically the causes of extreme fluctuations in commodity prices from January 1990 to June 2010 and seeks to identify the relative contribution of advanced and emerging market economies to the changes in commodity prices. Our assumption is that analyzing two very distinct goods—crude oil and fine wine—helps to identify common determinants of commodity prices. We find that the growth rate of global aggregate demand is the key macroeconomic determinant of the fluctuations in both crude oil and fine wine prices over the sample period. While advanced economies account for more than half of global consumption, emerging market and developing economies make up the bulk of the incremental change in demand, thereby having a greater weight in commodity price formation. The coefficient of emerging market industrial output growth is about three times as high as that of advanced economies in oil price regressions and almost five times as powerful in fine wine price regressions. The results also show that the shift in the composition of aggregate commodity demand is a recent phenomenon. (JEL Classifications: Q11, Q39, Q41, Q43)

A hedonic price function for Argentinean wines in the U.S market is estimated in order to evaluate the effect of the most important attributes of wine on price. Results show that labeling practices and the choice of the right wine quality attributes are far more influential on price than expert panel opinions or oenological wine improvements such as age. (JEL Classification: Q11, C21, D12)

The objective of this article is to analyze the determinants of world wine exports in the first globalization, taking into account the principal exporting countries and using an extended version of the gravity model. The article distinguishes between ordinary- and high-quality wines. Our econometric results show that wine exports were not affected by the increase in the size of the markets of consuming countries, since in most of them wine was an alcoholic beverage consumed by a very small minority of the population. The harvests of the producing countries, particularly in preceding years, significantly and positively affected their exports. Conversely, the harvests of importers hurt exports as there was a home bias in consumption due to cultural, price, or tariff protection reasons. In the interwar period, the wine trade was severely affected by a series of shocks such as WWI, the Soviet revolution, the Prohibition, and the 1930s depression. As was the case with trade as a whole, the fall in transaction costs, favored exports, at least those of lower-priced and lower-quality wine. However, the liberalization of trade had a lesser impact on wine than on other products. (JEL Classifications: F14, N50, Q13, Q17)