What are social factors affecting the demand for wine? - ANSWER - changes in consump-
tion habits
- changes in consumer preferences
- changes in reputation (region, producer, or individual wine)
- changes in spending patterns
What country has the largest wine consumption? - ANSWER US
What are possible reasons wine consumption would fall? - ANSWER - younger people
drinking less wine
- health concerns
- changes in lifestyle
- reduction in availability of cheap wine
What is a "price-sensitive" market? - ANSWER consumers are unwilling to pay more than
the lowest price possible for the style of wine they want to buy
What are economic factors affecting the demand for wine? - ANSWER - strength of the
economy
- fluctuations in currency exchange
- market changes (entry and exit of brands)
What are legislative and political factors affecting the demand for wine? - ANSWER - laws
prohibiting sale of alcohol
- gov't policies to reduce consumption (loi evin, BAC, minimum unit pricing)
1
,- taxation (excise duty, categories)
- international trade (relationships, customs duties/tariffs, trade wars)
- wine laws (PDO, PGI)
What is the Loi Evin? When was it introduced? - ANSWER - introduced in 1991
- has greatly restricted the advertising of alcoholic drinks and is considered a significant fac-
tor in the reduction in wine consumption in France
What is the Anti-Extravagance Campaign? - ANSWER law in China prohibiting the gifting
to or consumption by government officials of luxury wines and spirits
What are production factors affecting the demand for wine? - ANSWER - area under vine
- human factors (adoption of mondern techniques)
- natural factors (weather, climate change)
What factors have resulted in the loss of vineyard land, particularly in the EU? - ANSWER
- vine pull schemes
- EU restrictions on planting new vineyards
- conversion of vineyard land to other uses
- abandonment of rural areas
Describe the vine pull scheme in Europe in the mid-1980's. - ANSWER EU wine produc-
tion was much greater than demand, creating a surplus that came to be known as the 'wine
lake'. National governments and then the EU itself paid growers to pull up poor quality
vines, especially in southern France, Italy and Spain, with the result that, for example, in the
1980s, several hundred thousand hectares of European vines were pulled up.
What challenges exist when there is an oversupply of wine? - ANSWER - prices fall
- unsold wine in tanks/barrels/bottles (producers are forced to sell this at very low prices)
2
, - search for new markets
- devaluation of brand image, can create lasting damage
-May need to distill into brandy
What challenges exist when there is an undersupply of wine? what is a common factor that
results in an undersupply? - ANSWER - disappointed clients, strained business relation-
ships
- financial penalties and canceled contracts from retailers
- issuance on allocation
- consumers turn to alternatives (especially in price-sensitive markets)
- common factor: bad harvest
Grape Growing Costs include: - ANSWER - initial costs of establishing the vineyard
- ongoing costs of managing the vineyard and producing the grapes
What factors can increase vineyard land price? - ANSWER - potential to produce hi Q fruit
- name of appellation
- scarcity of land (rarely coming on the market, or GI-limited)
What are the costs of establishing a vineyard? - ANSWER - land purchase price
- surveying
- site clearance
- road building/access
- vines
- trellising
- drainage pipes/ditches
- irrigation system
- weather protection measures
3
tion habits
- changes in consumer preferences
- changes in reputation (region, producer, or individual wine)
- changes in spending patterns
What country has the largest wine consumption? - ANSWER US
What are possible reasons wine consumption would fall? - ANSWER - younger people
drinking less wine
- health concerns
- changes in lifestyle
- reduction in availability of cheap wine
What is a "price-sensitive" market? - ANSWER consumers are unwilling to pay more than
the lowest price possible for the style of wine they want to buy
What are economic factors affecting the demand for wine? - ANSWER - strength of the
economy
- fluctuations in currency exchange
- market changes (entry and exit of brands)
What are legislative and political factors affecting the demand for wine? - ANSWER - laws
prohibiting sale of alcohol
- gov't policies to reduce consumption (loi evin, BAC, minimum unit pricing)
1
,- taxation (excise duty, categories)
- international trade (relationships, customs duties/tariffs, trade wars)
- wine laws (PDO, PGI)
What is the Loi Evin? When was it introduced? - ANSWER - introduced in 1991
- has greatly restricted the advertising of alcoholic drinks and is considered a significant fac-
tor in the reduction in wine consumption in France
What is the Anti-Extravagance Campaign? - ANSWER law in China prohibiting the gifting
to or consumption by government officials of luxury wines and spirits
What are production factors affecting the demand for wine? - ANSWER - area under vine
- human factors (adoption of mondern techniques)
- natural factors (weather, climate change)
What factors have resulted in the loss of vineyard land, particularly in the EU? - ANSWER
- vine pull schemes
- EU restrictions on planting new vineyards
- conversion of vineyard land to other uses
- abandonment of rural areas
Describe the vine pull scheme in Europe in the mid-1980's. - ANSWER EU wine produc-
tion was much greater than demand, creating a surplus that came to be known as the 'wine
lake'. National governments and then the EU itself paid growers to pull up poor quality
vines, especially in southern France, Italy and Spain, with the result that, for example, in the
1980s, several hundred thousand hectares of European vines were pulled up.
What challenges exist when there is an oversupply of wine? - ANSWER - prices fall
- unsold wine in tanks/barrels/bottles (producers are forced to sell this at very low prices)
2
, - search for new markets
- devaluation of brand image, can create lasting damage
-May need to distill into brandy
What challenges exist when there is an undersupply of wine? what is a common factor that
results in an undersupply? - ANSWER - disappointed clients, strained business relation-
ships
- financial penalties and canceled contracts from retailers
- issuance on allocation
- consumers turn to alternatives (especially in price-sensitive markets)
- common factor: bad harvest
Grape Growing Costs include: - ANSWER - initial costs of establishing the vineyard
- ongoing costs of managing the vineyard and producing the grapes
What factors can increase vineyard land price? - ANSWER - potential to produce hi Q fruit
- name of appellation
- scarcity of land (rarely coming on the market, or GI-limited)
What are the costs of establishing a vineyard? - ANSWER - land purchase price
- surveying
- site clearance
- road building/access
- vines
- trellising
- drainage pipes/ditches
- irrigation system
- weather protection measures
3
