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Australian wines in the British wine market: A hedonic price analysis

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  • Bodo E. Steiner

    (Department of Rural Economy, University of Alberta, 515 General Services Building, Edmonton, AB T6G 2H1 Canada. E-mail: bsteiner@ualberta.ca)

Abstract

The market share of New World wines sold in many European countries has increased dramatically over the past decade. More aggressive marketing, together with a more distinct and recognizable labeling scheme, are often regarded as the keys to the marketing success of these new wines. This article employs hedonic price analysis to identify the values that marketers and consumers place on the information carried by the label of Australian wines in the British wine retail market. Although many grape varieties are given a highly distinct valuation by market participants, our results also suggest that consumers consider regions jointly with grape varieties as proxies for brands. This contrasts with the general observation that grape varietal labeling is the distinctive feature of New World wines. Marketing implications are examined by considering the revenue impact of changes in labeling at the retail level. [JEL citations: L150, D12, C21.] © 2004 Wiley Periodicals, Inc. Agribusiness 20: 287-307, 2004.

Suggested Citation

  • Bodo E. Steiner, 2004. "Australian wines in the British wine market: A hedonic price analysis," Agribusiness, John Wiley & Sons, Ltd., vol. 20(3), pages 287-307.
  • Handle: RePEc:wly:agribz:v:20:y:2004:i:3:p:287-307
    DOI: 10.1002/agr.20012
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    6. Scarpa, Riccardo & Thiene, Mara & Galletto, Luigi, 2006. "Consumers WTP for wine with certified origin: Latent classes based on attitudinal responses," 98th Seminar, June 29-July 2, 2006, Chania, Crete, Greece 10046, European Association of Agricultural Economists.
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    10. Steiner, Bodo E., 2009. "The Extent and Nature of Contracting in the Wine Supply-Chain When Moral Hazard is Present," Staff Paper Series 154127, University of Alberta, Department of Resource Economics and Environmental Sociology.
    11. Smith, Travis A. & Lin, Biing-Hwan & Huang, Chung L., 2008. "Organic Premiums of U.S. Fresh Produce," 2008 Conference, April 21-22, 2008, St. Louis, Missouri 37626, NCCC-134 Conference on Applied Commodity Price Analysis, Forecasting, and Market Risk Management.
    12. Timothy R. Davis & Fredoun Z. Ahmadi-Esfahani & Susana Iranzo, 2008. "Demand under product differentiation: an empirical analysis of the US wine market ," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 52(4), pages 401-417, December.
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    18. Osman Gulseven & Michael Wohlgenant, 2015. "A quality-based approach to estimating quantitative elasticities for differentiated products: an application to retail milk demand," Quality & Quantity: International Journal of Methodology, Springer, vol. 49(5), pages 2077-2096, September.
    19. Xu, Xun & Loke, Matthew K. & Leung, PingSun, 2015. "Is There a Price Premium for Local Food? The Case of the Fresh Lettuce Market in Hawaii," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 44(1), pages 1-14, April.
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    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models

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