Wine Policy Research Articles

Quality Function Deployment: Identification of Key Parameters in Grape Growing and Wine Making

Background: The study conducted benchmarking research, assessed and identified suitable factors for the efficient benchmarking of Karnataka wines. As the Grape Processing Industry Board is being formed by the Wine Board of Karnataka (Wine Policy ‘2007’), which may have control of grape quality, standards formulation, label approval and market promotion, the study focused on recommending strategies for quality grape-growing, wine-making for label approvals. Methods: The study adopted the Quality Function Deployment (QFD) tool to build the House of Quality to benchmark Karnataka wines with the New World wines. Result: The findings demonstrate that the informative label was given high importance by customers during wine purchases. The wine industry to meet this requirement should focus more, on the factor-crushing method of grapes. Karnataka wineries are inferior to wine from other New World regions when it comes to other aspects such as flavour, colour, brand name, grape variety, meal pairings, alcohol content, wine label designand label information.

How can public policies facilitate local cooperation? insights from the EU’s wine policy

ABSTRACT Decentralised cooperation is key for achieving a range of policy goals, but we still know relatively little about how to create it in low-trust, institutionally weak settings. This article develops an account of Facilitative Overarching Institutional Frameworks (FOIFs) as macro-level institutions that abate the obstacles to local cooperation. Through qualitative evidence collected via fieldwork, it is shown that the EU’s wine policy is a good example of a FOIF, and that it has crucially contributed to the puzzling emergence of demanding forms of local cooperation in the Greek wine sector. When combined with favourable local conditions, and particularly with local leadership, as in Santorini, a FOIF can have transformative implications for local cooperation. When local leadership is absent, as in Lemnos, the final degree of local cooperation will be more limited. While the rareness of embedded policymaking in Greece inhibits the adoption of public policies that favour decentralised cooperation, in the wine sector the EU’s system of subsidies and geographical indications partially compensates for these for domestic institutional deficiencies. The article contributes to our knowledge about the emergence of decentralised cooperation in adverse circumstances and improves our understanding of the effects of transnational integration regimes on local governance arrangements.

Is a new EU wine policy coming? The unexpected role of regulatory measures

On January 1, 2023, a “reformed” Common Agricultural Policy (CAP) will come into force, which is innovative by nature in structural terms, and focused on environmental and social sustainability issues, aimed at a comprehensive digitization-based modernization of the agri-food sector. The new CAP keeps the current structure based on expenditure and regulatory measures, but includes a new planning tool, the national CAP Strategic Plan, a new CAP management model, and the new delivery model (NDM). Concerning EU wine policy, the new regulations foresee a number of specific amendments to existing rules, including changes that will apply to financial support for the wine sector with a reduced budget and to the regulatory measures. Among the latter, the most globally impacting are labelling rules, which require more information to consumers and allow the use of an e-label, the use of hybrid grape varieties for the production of appellation wines, and the inclusion among CAP regulated products of partially or totally de-alcoholised wines.

Reflections on the Political Economy of European Wine Appellations

Today’s European wine policy is centered on a system of appellations, implemented as geographical indications (GIs), that entail significant technological regulations—restricting the varieties that may be grown, while imposing maximum yields per hectare and other rules regarding grape production and winemaking practice. This paper outlines the historical development of European wine policy under the CAP, and presents a more detailed analysis of the economic consequences of the rules and regulations under the appellation system. The introduction of these rules and regulations was probably beneficial initially, both for their didactive effect on wine producers and consumers and as a way of overcoming a significant “lemons” problem in the market. However, those same rules and regulations are much less valuable today, given (1) the potential for alternative sources of information to solve the lemons problem, and (2) evidence that the appellation system per se might not be effectively serving that purpose as well as it once did, while some of the regulations impose significant social costs. Yield restrictions, in particular, are economically inefficient as a way of enhancing and signaling quality (their ostensible purpose) and as a way of restricting total supply to support market prices and thus producer incomes (a significant motivation). The inherent weaknesses of the policy design are compounded by failures of governance. A less heavy-handed approach to policy would allow more scope for the market mechanism to match supply and demand for this signature product from European agriculture.

GROWTH RATES OF DIFFERENT WINE BRANDS OF NISARGA WINERY- A CASE STUDY

The government of Karnataka has announced wine policy, as result of which many wine yards were established. Nisarga winery in Vijaypur district was one such unit. The specific objectives of the study are to estimate the growth rates in production and sale of different wines and to study per liter production cost of different wines. The primary data for the year 2017-18 was collected from the general manager of the unit. The growth rate analysis, descriptive statistics were used for the study. The Compound annual growth rate of production of Nisarga winery was 1.94 which was non-significant whereas its 1.86 for sale which was significant @ 1 per cent.

Negotiating French Wine and European Identities at the European Community

This article examines the French role in creating an integrated wine policy at the European level and demonstrates that political negotiations over the policy revealed competing European conceptions of agriculture and identity. Drawing on research in EEC and French historical archives, this article argues that in spite of the risks involved in relinquishing sovereignty over a key national industry with deep cultural resonance, the French government was determined to transfer responsibility for much of the sector to the European Community due to continued domestic pressure. Further, it suggests that common values around the centrality of agriculture in the European project meant that countries were persistent in realising a wine policy even though wine was not a natural fit in the pantheon of other goods for which common markets were created.

Selling the French Past, Selling Wine, and Erasing Labor from Terroir

ABSTRACTWhile the word terroir was used sparsely in wine literature dating back to the Middle Ages, our current approach to the term is largely a result of debates that began in France in the early twentieth century. It was in those debates that French wines were said to be vins de terroir because they were vins d’histoire, an expression of a “naturalized” wine-based civilization that had existed over millennia. This article examines the unsuccessful attempts by social scientists and historians to write that history with a focus on labor as a central element of terroir. I demonstrate the flexible redeployment of the language of terroir across the political spectrum at a critical moment in the creation of twentieth-century French wine policy.

The political economy of regulations and trade: Wine trade 1860–1970

AbstractDramatic changes in the 1860–1970 wine trade provide insights on the political economy of regulations and policy instrument choice and trade. An invasion of Phylloxera in the 1870s turned France from the world's leading exporter to a massive importer of wine and grapes. When French production recovered a combination of tariffs, safety regulations and quality standards were introduced to protect its French producers, causing dramatic changes in global wine and grape production and trade, including in Spain, Italy, Turkey, Greece, Algeria, Tunisia and Morocco. Changes in wine regulations were caused by relative income and loss aversion factors in political economy. Tariffs were the preferred policy instruments as they directly restrict imports, bring in revenues, have low transaction costs and are preferred political instruments when there are information imperfections. Safety regulations and quality standards, including labelling and input prohibitions, reduce asymmetric information for consumers or undesirable externalities, and simultaneously protected domestic producers. Regulations were often targeted at imported products (wine and raisins) when tariffs were ineffective or constrained by institutions (such as on colonial wine). Hence, tariffs and quality regulations were jointly used in wine policy, both as complements and as substitutes in policy design.

A new wine superpower? An analysis of the Chinese wine industry

China is one of the most attractive wine markets and a hopeful wine producer in the twenty-first century. Current studies of wine in China tend to focus on the wine market but seldom analyze the domestic wine industry, which contributes approximately 70% of the total wine consumed in the country. This paper reviews the wine history and the development of wine in China and analyses the current situation and perspectives of the Chinese wine industry, considering both traditional conditions such as wine production and wine policies, as well as new conditions such as e-commerce, climate change and domestic economy trend. We present a “SWOT” (strengths, weaknesses, opportunities and threats) analysis of the Chinese wine industry considering four sectors (producing, processing, selling and consuming) and we use a SWOT matrix analysis to identify possible improvement strategies. Finally, we propose strategies for the development of the Chinese wine industry at governmental level, industrial level and business level.

The challenging issue of climate change for sustainable grape and wine production

<p>Grape production, wine quality, climatic conditions and geographical origins are closely related, making ongoing climate change a quite challenging issue for this economic sector. How will climatic conditions be affected locally ? How will local climate interact with topography, resulting in high climatic variability at vineyard scale ? How will vine performance, berry composition and wine quality be modified ? And what can be done to adapt vine growing and wine making practices to these new conditions ? These are the key questions the wine industry has to address in the following decades. In this context, it is obvious that this issue will require the development of close collaboration between actors, including producers and wine makers, extension services, marketing, policy makers and scientists. For the scientific community, addressing the climate change issue requires multidisciplinary studies and new scientific approaches.</p>

European Wine Policies and their consequences on the global wine trade

Over the years EU policy has introduced a number of instruments with the principal goal, until the middle of 1980, being to ensure the development of productivity, the creation of market stability and the provision of income support while building tariffs and non-tariff measures for trade policy. While continuing on the path of reform which started in the early '90s, it was only with the 2008 and 2013 reforms that wine policy changed significantly from a policy based on subsidising the production and protection of domestic markets from non-European producers, to a policy that aims to stimulate the quality production and competitiveness of the wine sector on the international scene. The Common Agricultural Policy, and the EU domestic and international contexts have (probably) played an important role in the design of the strategies for wine interventions. What is going on in the EU wine sector and what has gone wrong? The purpose of this paper is to focus on the historical evolution of wine policies through three phases and their consequences on EU budgets and on global markets.The study is based on an in-depth analysis of EU wine policies, the financial expenditures and the market relationship of EU wine in the global scenario. The thread which runs through this paper is that the controversial aspects of the wine sector are urgent requests from holdings to both policymakers to intervene with market laws and rules, and to the policy itself which aims to correct its own failings. EU policy has arrived late (too late) to understand the increasing threat posed by the competitive growth of third countries. After 46 years of implementation (1970-2016), the ‘classic dilemma’ between policymakers and markets, the trade-offs between markets and policy, are still the drivers of the EU wine policy.

The effect of wine policy on the emerging cold-hardy wine industry in the northern U.S. states

The recent development of cold-hardy and disease-resistant grape cultivars have enabled rapid expansion of the wine industry in northern states in the United States. As the nascent enterprises seek sustainable profitability, it is important to understand what factors are making the industry sustainable. Using the primary dataset collected in 2012 from 82 wineries currently operating across 10 northern states, this study examines how state-level policies are influencing the revenue of the emerging wine industry. OLS and quantile regression methods are employed to account for heterogeneous effects of policy instruments on sales of wineries. The empirical results show that policies directed at the wine industry have heterogeneous effects on the revenue streams of wineries depending on the location of a winery along the revenue distribution curve of wineries in northern U.S. states.

The knowledge of Italian wines on export markets

Purpose – The European Union (EU) has strongly rearranged the management of EU wine policy by introducing actions for promoting wine in third countries. The purpose of this paper is to evaluate factors affecting the knowledge of Italian wines in foreign consumers, i.e., to what extend wine promotion actions can improve the consumer’s awareness or the reputation of Italian wines. As a consequence, these activities may increase the wine consumption as well as wine exports in emerging markets. Design/methodology/approach – Data have been collected through survey questionnaires where information about wine tasting, sensory satisfaction and preferences about Italian wines have been collected. The sample survey collects preferences of wine market operators in both EU and third countries. The survey, carried out from 2009 to 2011, includes 3,579 interviews classified according to four promotion actions: press conference, wine tasting, tasting course, knowledge of Italian wines. Data have been analyzed through a nonparametric combination (NPC) of dependent permutation tests to evaluate differences between and within country groups and to assess the consumer perception about Italian wines through the Keller’s model. Findings – So far, Italian wine promotion activities, supported by EU wine policy, are fragmented among in many small and sometimes low effective actions. Research results may be helpful in designing more effective promotional strategies on third countries. In particular, promotional activities which should be focussed on consumer’s appreciation of Italian wines as a brand instead of promoting specific wines or wineries. Research limitations/implications – The NPC method is a nonparametric tool which does not measure the structure of consumer’s preferences, i.e, it does give any measure of relationships among consumer’s utility and factors affecting it as it happens when a modeling approach is applied. Practical implications – Targeted promotion and information actions strongly focussed internal and external wine attributes can increase the level of knowledge in foreign consumers. It can make more efficient the marketing activity oriented to the export market. Originality/value – The NPC method offers an innovative, flexible and well-tested approach for the analysis of multivariate hypothesis when we are dealing with complex problems in wine market.

Managing the Quality Wines beyond Policies and Business Strategies

The premise, which has always characterized legislation for Appellation of Origin (or Geographical Indications) as an indicator of quality wines is represented by the dogma of the real or imagined interaction between the vine variety, territory, and method of production and wine business and marketing strategies. This dogma determines the variability of the range of products and supports the thesis according to which the smaller the area of origin, the easier it is to determine product homogeneity and typical characteristics. Refuting this dogma means dismantling the European model behind DOs. The aim of this paper is to try to make an answer to the following questions: a) How to regulate the high quality wines located to the upper side of the quality wine pyramid and how to cover the gap of the EU wine policy? b) Introducing a business strategy like a new wine category inside the GI on the top of the quality pyramid does increase the total market size and prices of the GI? c) What will be the effect on equilibrium price and quantity within the GI? The questions could be addressed following a double approach. The first examines the quality wines follows the policy approach and describes the different level of regulation in the European scenario. The second takes as an example the history of Super Tuscan wines. The framework that supports the hypothesis and a description of the six theoretical assumptions that form part of the paper will be presented analyzing the political constraints. Here we will present the necessary theoretical background for modeling and some adaptive problems will discussions in the final part.

The economics of planting rights in wine production

The European Union (EU) is the world's largest wine producer, as well as the world's most regulated wine market. In 2007, the EU decided on a major reform of its wine policy. A crucial element was the abolishment of a system of planting rights to limit the planting of vineyards. However, after intense lobbying by opponents of the liberalisation, this decision was reversed in 2013. Despite the importance of planting rights in European (and hence global) wine production, and despite the fierce debates surrounding the reforms, no model exists to study the effects of this policy. We develop the first theoretical model of planting rights, integrating the markets for land, planting rights and wine to analyse efficiency and distributional effects. We use the model to study the effects of differences among EU member states in restrictions on trade in planting rights, the role of government reserves and the impact of imperfect enforcement.

The Economics of Planting Rights in Wine Production

Almost half of the world’s vineyards are in the EU and the EU produces around 60% of the world’s wine. The EU is also the world’s most regulated wine market. In 2007, the European Union decided on a major reform of its wine policy, the so-called Common Market Organization (CMO) for wine. A crucial element was the abolishment of a system of planting rights to regulate planting of vineyards in the EU. However, before its implementation opponents of the liberalization of planting rights are lobbying EU governments to reverse the decision. Our paper provides the first theoretical analysis of the economic effects and the welfare implications of planting rights. Our model integrates the markets for land, planting rights and wine to analyze the efficiency and distributional effects. We analyze the impact of enforcement problems, trade restrictions, and the use of government reserves in the planting rights system.

The Rise and Fall of the World's Largest Wine Exporter—And Its Institutional Legacy

AbstractThis paper analyzes the causes of the rise and the fall of the Algerian wine industry. It is hard to imagine in the twenty-first century global wine economy, but until about 50 years ago Algeria was the largest exporter of wine in the world—and by a wide margin. Between 1880 and 1930 Algerian wine production grew dramatically. Equally spectacular was the decline of Algerian wine production: today, Algeria produces and exports little wine. There was an important bidirectional impact between developments in the Algerian wine sector and French regulations. French regulations had a major impact on the Algerian wine industry, and the growth of the Algerian wine industry triggered the introduction of important wine regulations in France at the beginning of the twentieth century and during the 1930s. Important elements of these regulations are still present in European wine policy today. (JEL Classifications: K23, L51, N44, N54, Q13)

The Rise and Fall of the World's Largest Wine Exporter (and It's Institutional Legacy)

It is hard to imagine in the 21st century global wine economy, but until 50 years ago Algeria was the largest exporter of wine in the world – and by a wide margin. Between 1880 and 1930, Algerian wine production grew dramatically. Equally spectacular is the decline of Algerian wine production: Today, Algeria produces and exports little wine. This paper analyzes the causes of the rise and the fall of the Algerian wine industry. There was an important bi-directional impact between developments of the Algerian wine sector and French regulations. French regulations had a major impact on the Algerian wine industry. Vice versa, the growth of the Algerian wine industry triggered the introduction of important wine regulations in France at the beginning of the 20th century and during the 1930s. Important elements of these regulations are still present in the European Wine Policy today.

When Sector Meets Territory: The Case of European Union Wine Policy

Studies of sectorial government seldom theorize its relationship to territory, i.e. to constructed, institutionalized but nevertheless contingent political spaces. This is particularly problematic in research on European integration—a process largely driven by the progressive institutionalization of sectors and its considerable reterritorializing effects. This article seeks to relaunch debate on sector-territory relations by proposing a constructivist and institutionalist approach to the ‘political work’ of sectorial and extra-sectorial actors. Territory impacts upon this work by being simultaneously a jurisdiction, a constituency for political representation and a stock of symbolic resources. This three-pronged definition is then applied to explain a recent reform of the European Union's wine policy that was 20 years in the making. Contrary to material determinist or organizational readings of this change, its causes are to be found in how actors strove to reinstitutionalize the European wine sector's relationship to territory, and this whilst legitimating both this political project and themselves.

European wine policy and perceptions of Moravian winemakers: a pilot study in the Czech Republic

European wine policy is a significant factor influencing winemakers in the European Union. This paper examines perception of this policy by winemakers and other persons working in Czech wine sector on the sample of respondents. Methodological triangulation consisting of non-structured interview and semantic differential was chosen. Field research was carried out, therefore the study uses primary data. Application of the methodology along with the method of evaluation of data creates an original approach which may be applied on several other research questions. General perception of European Wine Policy is complemented with its impact on competitiveness, practical running of vineyards and winery and on future development of winery. Data is statistically evaluated within categories of respondents. Special emphasis is placed on direct payments as a controversial factor of the policy. The policy is perceived as bureaucratic (“all respondents” x = 4.56), and among micro winemakers discriminating (x = 4.5), selfish (x = 4.5) and malfunctioning (x = 3.5). “Professional” winemakers perceive the impact on competitiveness in the Czech market as rather positive (x = 2.67). This study represents pilot research on perception of European Wine Policy by owners of wineries, viticulturists, micro winemakers, a sommelier and a representative of marketing-supporting institution, conducted in the Czech Republic. The author also outlines further direction of research, as the topic is not paid enough scientific attention.