Would ‘New World’ wines benefit from protected geographical indications in international markets? The case of Argentinean Malbec

Abstract

The growth of high value agri-food trade and origin-based marketing strategies has triggered a vigorous debate over the need to protect Geographical Indications (GIs). While domestic protection is a first step, international recognition is crucial for export products. Argentina has not yet signed bilateral or multilateral agreements for international GI recognition, while non-protected geographical names (GNs) are widely used by wineries when exporting. The hedonic literature has largely explored consumers' willingness to pay for wine attributes, including GIs. However, cross-country analyses have not been conducted for New World wines, and their characteristics have not been evaluated in Old World markets. This paper casts new light on this issue by estimating the implicit price of Argentinean GNs in four different markets: the United States, the United Kingdom, the Netherlands and Germany. Overall, the research highlights that – according to the well established wine producing and consuming countries classification – New and Old World consumers differ in their willingness to pay for GNs when buying high- to medium-priced Argentinean wines in specialised shops. The paper concludes by emphasising the market access opportunities offered by an international agreement on GIs protection that would enhance consumers' ‘telescopic ability’ to recognise and discriminate among terroir-related wine attributes.