VERIFIED ANSWERS
1. What are social factors affecting the demand for wine?
Answer: changes in consumption habits, changes in consumer
preferences, changes in reputation (region, producer, or individual wine),
changes in spending patterns
2. What country has the largest wine consumption?
Answer: US
3. What are possible reasons wine consumption would fall?
Answer: younger people drinking less wine, health concerns, changes in
lifestyle, reduced availability of cheap wine
4. 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
5. 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)
6. 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), taxation (excise duty,
categories), international trade (relationships, customs duties/tariffs,
trade wars), wine laws (PDO, PGI)
7. 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 factor in the reduction in
wine consumption in France
,8. What is the Anti-Extravagance Campaign?
Answer: law in China prohibiting the gifting to or consumption by
government officials of luxury wines and spirits
9. What are production factors affecting the demand for wine?
Answer: area under vine, human factors (adoption of modern techniques),
natural factors (weather, climate change)
10.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
11.Describe the vine pull scheme in Europe in the mid-1980's.
Answer: EU wine production 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.
12.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), search for new markets, devaluation
of brand image, can create lasting damage
13.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 relationships, financial
penalties and canceled contracts from retailers, issuance on allocation,
consumers turn to alternatives (especially in price-sensitive markets);
common factor: bad harvest
14.What are the 2 categories of grape growing cost?
Answer: initial costs of establishing the vineyard, ongoing costs of
managing the vineyard and producing the grapes
, 15.What factors can increase vineyard land price?
Answer: potential to produce high quality fruit, name of appellation,
scarcity of land (rarely coming on the market, or GI-limited)
16.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, animal pest protection measures,
machinery and equipment
17.What are the costs of vineyard management?
Answer: labor (varies due to topography, organic/BD farming), machinery
and equipment running costs (e.g. fuel and maintenance), vineyard
materials (e.g. replacement vines and trellising), vineyard treatments,
water, electricity
18.What are the costs of winemaking?
Answer: labour (full-time & casual labor around harvest time), machinery
and equipment running costs (e.g. fuel, electricity and maintenance),
winery materials (e.g. sugar for enrichment, de-acidification agents, acid
for acidification, cultured yeasts, carbon dioxide or other inert gasses,
fining and filtering agents), bought-in fruit, water, electricity
19.What are the costs of maturation?
Answer: storage space, oak (new or used barrels, oak chips, staves), labor,
loss of cash flow
20.What are the costs of packaging?
Answer: materials (e.g. bottles, closures, labels, cartons, and pallets),
bottling line, labor, design
21.What are the 4 ways of transporting wine? What are the benefits and
detriments of each?
Answer: air: fast; expensive. Road: efficient for short journeys, good for
dealing with small bodies of water; expensive for long journeys. Rail: good