WSET Level 4 questions with accurate detailed answers
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Describe what happens when relative supply and demand change - ✔✔- When supply
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exceeds demand: price falls, consumer have greater choice of cheaper alternatives.
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Producers lower price to remain competitive. Fall in prices lead to increased demand in the
|| || || || || || || || || || || || || || ||
long run ||
- When demand exceeds supply: price increase, consumers willing to pay higher for some
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wines; others simply switch to another wine or a different alcoholic drink
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The general factors affecting demand for wine - ✔✔- Social
|| || || || || || || || ||
- Economic
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- Legislative
||
- Political
||
List major social factors affecting demand for wine - ✔✔- Change in consumption habits
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- Change in consumer preferences
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- Change in reputation
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- Change in spending patterns
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Describe how global wine consumption habits have changed since 2001 - ✔✔- Rapid
|| || || || || || || || || || || || ||
growth in the first part of 2000
|| || || || || ||
- Fall after 2008 financial crisis as many consumers reduce spending on non-essential
|| || || || || || || || || || || || ||
products
- Slight decline in recent years and due to remain stable to 2021
|| || || || || || || || || || || ||
- Strong growth in sparkling wine sales
|| || || || || ||
,Top five countries for total wine consumption in 2017 - ✔✔- USA
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- France
||
- Italy
||
- Germany
||
- China
||
Explain the increasing wine consumption in USA in the last 20-30 yr - ✔✔- Increasing
|| || || || || || || || || || || || || || ||
globalization of the food and drinks industry || || || || || ||
- Consumers more able and willing to embrace new tastes
|| || || || || || || || ||
- Increases and improvement in wine production in the domestic market
|| || || || || || || || || ||
Explain the increasing wine consumption in China - ✔✔- Growing middle class showing
|| || || || || || || || || || || || ||
wealth and status - move away from local drinks
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- Aspire to drink imported wine
|| || || || ||
- Bilateral trade agreement with Australia, Chile etc
|| || || || || || ||
Give possible reasons for falling wine consumption in traditional wine-drinking countries -
|| || || || || || || || || || || ||
✔✔- Younger people drinking less wine: old fashioned; less time in bars, more on social
|| || || || || || || || || || || || || || ||
media
- Health concerns: mostly due to government campaigns, e.g., Loi Evin in France
|| || || || || || || || || || || ||
- Changes in lifestyle: less time for longer meals, less lunchtime drinking
|| || || || || || || || || || ||
- Reduced availability of cheap wine: reduce over-production, some consumers switch to
|| || || || || || || || || || || ||
cheaper alcoholic drinks || ||
List a few major changes in consumer preferences in recent years - ✔✔- Rose and Prosecco
|| || || || || || || || || || || || || || || ||
become popular ||
- Increased demand for lower-alcohol wines
|| || || || ||
,- Medium-sweet German wines and fortified wines going out of fashion
|| || || || || || || || || ||
What factors could influence a wine's reputation? - ✔✔- Good reviews from leading
|| || || || || || || || || || || || ||
publications and critics || ||
- Online influencers and KOLs
|| || || ||
- Presence in popular culture, e.g., films television series, music lyrics or celebrity lifestyle
|| || || || || || || || || || || || || ||
news
- Peer opinions
|| ||
What are price-sensitive markets? Give examples - ✔✔Markets where consumers are
|| || || || || || || || || || ||
unwilling to pay more than the lowest price possible for the style of wine they want to buy.
|| || || || || || || || || || || || || || || || || ||
E.g., Germany, UK
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What can producers do to retain customers in price-sensitive markets? - ✔✔- Competition
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is fierce - reduce price or simply choose not to sell
|| || || || || || || || || ||
- Reluctant to pass on increases in production costs to consumers
|| || || || || || || || || ||
- Try to build up 'brand loyalty'
|| || || || || ||
Explain 'premiumization' - ✔✔- Consumers are increasingly willing to pay more for
|| || || || || || || || || || || ||
individual bottles of wine, often because they are buying less wine by volume
|| || || || || || || || || || || ||
- Happens in USA even in UK
|| || || || || ||
List major economic factors that influence demand for wine - ✔✔- Strength of economy
|| || || || || || || || || || || || ||
- Fluctuations in currency exchange
|| || || ||
- Changes to the market
|| || || ||
Give examples in which the strength of economy affect wine demand - ✔✔- 2008 financial
|| || || || || || || || || || || || || || ||
crisis: champagne demand falls, Prosecco grew; trade wine for beer, cider etc
|| || || || || || || || || || ||
, - Chinese economy growing: emerging middle class chasing aspirational wines
|| || || || || || || || ||
In what kind of market does currency fluctuation have the most significant impact on the
|| || || || || || || || || || || || || || ||
demand for wine? - ✔✔Price-sensitive market || || || || ||
When a wine-exporting country's currency gains value compared to that of the importing
|| || || || || || || || || || || || ||
country, what can a producer do? - ✔✔- Increase wine price and losing sales
|| || || || || || || || || || || || ||
- Keep the price and lose profit
|| || || || || ||
When a wine-exporting country's currency loses value compared to that of the importing
|| || || || || || || || || || || || ||
country, what can a producer do? - ✔✔- Lower price and boost sales
|| || || || || || || || || || || ||
- Keep price stable and improve profits for future investment
|| || || || || || || || ||
What is one downside of weak currency on the part of the producer? - ✔✔Costs more to
|| || || || || || || || || || || || || || || || ||
import equipment and supplies such as barrels, corks and yeast, which may offset
|| || || || || || || || || || || || ||
additional profits ||
How does changes to the market affect demand for wine? - ✔✔- New companies/products
|| || || || || || || || || || || || || ||
enter, others disappear
|| ||
- Opportunities for competition
|| || ||
- However, if supply is limited, price increase is possible
|| || || || || || || || ||
List major legislative and political factors that affect demand for wine - ✔✔- Laws
|| || || || || || || || || || || || || ||
prohibiting or limiting alcohol sale || || || ||
- Government policies to reduce alcohol consumption
|| || || || || ||
- Taxation
||
- International trade
|| ||
- Wine laws
|| ||
|| || || || || || ||
Describe what happens when relative supply and demand change - ✔✔- When supply
|| || || || || || || || || || || || ||
exceeds demand: price falls, consumer have greater choice of cheaper alternatives.
|| || || || || || || || || || ||
Producers lower price to remain competitive. Fall in prices lead to increased demand in the
|| || || || || || || || || || || || || || ||
long run ||
- When demand exceeds supply: price increase, consumers willing to pay higher for some
|| || || || || || || || || || || || || ||
wines; others simply switch to another wine or a different alcoholic drink
|| || || || || || || || || || ||
The general factors affecting demand for wine - ✔✔- Social
|| || || || || || || || ||
- Economic
||
- Legislative
||
- Political
||
List major social factors affecting demand for wine - ✔✔- Change in consumption habits
|| || || || || || || || || || || || ||
- Change in consumer preferences
|| || || ||
- Change in reputation
|| || ||
- Change in spending patterns
|| || || ||
Describe how global wine consumption habits have changed since 2001 - ✔✔- Rapid
|| || || || || || || || || || || || ||
growth in the first part of 2000
|| || || || || ||
- Fall after 2008 financial crisis as many consumers reduce spending on non-essential
|| || || || || || || || || || || || ||
products
- Slight decline in recent years and due to remain stable to 2021
|| || || || || || || || || || || ||
- Strong growth in sparkling wine sales
|| || || || || ||
,Top five countries for total wine consumption in 2017 - ✔✔- USA
|| || || || || || || || || || ||
- France
||
- Italy
||
- Germany
||
- China
||
Explain the increasing wine consumption in USA in the last 20-30 yr - ✔✔- Increasing
|| || || || || || || || || || || || || || ||
globalization of the food and drinks industry || || || || || ||
- Consumers more able and willing to embrace new tastes
|| || || || || || || || ||
- Increases and improvement in wine production in the domestic market
|| || || || || || || || || ||
Explain the increasing wine consumption in China - ✔✔- Growing middle class showing
|| || || || || || || || || || || || ||
wealth and status - move away from local drinks
|| || || || || || || ||
- Aspire to drink imported wine
|| || || || ||
- Bilateral trade agreement with Australia, Chile etc
|| || || || || || ||
Give possible reasons for falling wine consumption in traditional wine-drinking countries -
|| || || || || || || || || || || ||
✔✔- Younger people drinking less wine: old fashioned; less time in bars, more on social
|| || || || || || || || || || || || || || ||
media
- Health concerns: mostly due to government campaigns, e.g., Loi Evin in France
|| || || || || || || || || || || ||
- Changes in lifestyle: less time for longer meals, less lunchtime drinking
|| || || || || || || || || || ||
- Reduced availability of cheap wine: reduce over-production, some consumers switch to
|| || || || || || || || || || || ||
cheaper alcoholic drinks || ||
List a few major changes in consumer preferences in recent years - ✔✔- Rose and Prosecco
|| || || || || || || || || || || || || || || ||
become popular ||
- Increased demand for lower-alcohol wines
|| || || || ||
,- Medium-sweet German wines and fortified wines going out of fashion
|| || || || || || || || || ||
What factors could influence a wine's reputation? - ✔✔- Good reviews from leading
|| || || || || || || || || || || || ||
publications and critics || ||
- Online influencers and KOLs
|| || || ||
- Presence in popular culture, e.g., films television series, music lyrics or celebrity lifestyle
|| || || || || || || || || || || || || ||
news
- Peer opinions
|| ||
What are price-sensitive markets? Give examples - ✔✔Markets where consumers are
|| || || || || || || || || || ||
unwilling to pay more than the lowest price possible for the style of wine they want to buy.
|| || || || || || || || || || || || || || || || || ||
E.g., Germany, UK
|| ||
What can producers do to retain customers in price-sensitive markets? - ✔✔- Competition
|| || || || || || || || || || || || ||
is fierce - reduce price or simply choose not to sell
|| || || || || || || || || ||
- Reluctant to pass on increases in production costs to consumers
|| || || || || || || || || ||
- Try to build up 'brand loyalty'
|| || || || || ||
Explain 'premiumization' - ✔✔- Consumers are increasingly willing to pay more for
|| || || || || || || || || || || ||
individual bottles of wine, often because they are buying less wine by volume
|| || || || || || || || || || || ||
- Happens in USA even in UK
|| || || || || ||
List major economic factors that influence demand for wine - ✔✔- Strength of economy
|| || || || || || || || || || || || ||
- Fluctuations in currency exchange
|| || || ||
- Changes to the market
|| || || ||
Give examples in which the strength of economy affect wine demand - ✔✔- 2008 financial
|| || || || || || || || || || || || || || ||
crisis: champagne demand falls, Prosecco grew; trade wine for beer, cider etc
|| || || || || || || || || || ||
, - Chinese economy growing: emerging middle class chasing aspirational wines
|| || || || || || || || ||
In what kind of market does currency fluctuation have the most significant impact on the
|| || || || || || || || || || || || || || ||
demand for wine? - ✔✔Price-sensitive market || || || || ||
When a wine-exporting country's currency gains value compared to that of the importing
|| || || || || || || || || || || || ||
country, what can a producer do? - ✔✔- Increase wine price and losing sales
|| || || || || || || || || || || || ||
- Keep the price and lose profit
|| || || || || ||
When a wine-exporting country's currency loses value compared to that of the importing
|| || || || || || || || || || || || ||
country, what can a producer do? - ✔✔- Lower price and boost sales
|| || || || || || || || || || || ||
- Keep price stable and improve profits for future investment
|| || || || || || || || ||
What is one downside of weak currency on the part of the producer? - ✔✔Costs more to
|| || || || || || || || || || || || || || || || ||
import equipment and supplies such as barrels, corks and yeast, which may offset
|| || || || || || || || || || || || ||
additional profits ||
How does changes to the market affect demand for wine? - ✔✔- New companies/products
|| || || || || || || || || || || || || ||
enter, others disappear
|| ||
- Opportunities for competition
|| || ||
- However, if supply is limited, price increase is possible
|| || || || || || || || ||
List major legislative and political factors that affect demand for wine - ✔✔- Laws
|| || || || || || || || || || || || || ||
prohibiting or limiting alcohol sale || || || ||
- Government policies to reduce alcohol consumption
|| || || || || ||
- Taxation
||
- International trade
|| ||
- Wine laws
|| ||
