Working Paper: CEPR ID: DP3169
Authors: Kym Anderson; David Norman; Glyn Wittwer
Abstract: Globalization is not new to the world?s wine markets, but its influence over the past decade or so has increased dramatically. This Paper reviews the effects of that on both the Old World and New World. In focusing retrospectively on the period since the late 1980s, it points to the dramatic increase in the industry?s export orientation and quality upgrading in the New World and the consequent competitive pressure on the Old World in key import markets. Looking forward, the Paper draws on a new model of the world?s wine markets that distinguishes non-premium, commercial premium and super-plus premium wines in each of 47 countries or country groups spanning the world. It projects recent developments to 2005, based on income, population and taste trends on the demand side and vine acreage and productivity trends on the supply side of each market. The effect of a slowdown in the global economy in the medium term is also considered. The results expose numerous implications of recent and prospective developments on key wine-exporting regions.
Keywords: globalization; projection; modelling; quality upgrading; wine trade
JEL Codes: C53; F15; F17; Q13
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Globalization (F60) | Increase in export orientation of the wine industry (L66) |
| Increase in export orientation of the wine industry (L66) | Competitive pressure on old world producers (L11) |
| Quality upgrading in new world wines (L66) | Increase in market share of new world wines (F62) |