Ethnocentrism and the selection of white wine by young Australian consumers

Abstract

ABSTRACT We investigate consumer preferences for domestically produced white wines compared to foreign wines in Australia. A discrete choice experiment was used to analyze young Australian consumers’ preferences regarding white wine and a latent class model was estimated to take preference heterogeneity into account. We examine the relationship between consumers’ ethnocentrism and preferences for wine from a specific origin. Highly ethnocentric Australian wine consumers are found to strongly prefer Australian wines and to a lesser extent wine from New Zealand compared to otherwise identical French wine, confirming a country-of-origin effect. Carefully considering the information to include on wine labels helps to stimulate consumer demand in certain market segments. Producers can use information regarding consumer preferences for specific wine characteristics to put an attractive and profitable product on the market. For instance, Australian wines might have a domestic advantage over similar foreign wines, if this ‘country of origin’ is brought to the consumers’ attention. Hence, labeling wine as ‘Made in Australia’ is likely to increase the willingness to buy wines amongst a significant subgroup of Australian consumers aged 18–38. Adding other specific labels such as gold or silver medals to the bottle can also attract specific customer segments.