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Geography versus brands in a global wine market


  • Günter Schamel

    (Humboldt University Berlin, Institute of Agricultural Economics and, Social Sciences, Luisenstrasse 56, D-10099 Berlin, Germany)


Producer brands increasingly dominate global wine markets, while generic advertising promotes regionality and exports (e.g., Australia, Spain). We analyze U.S. price data and quality indicators for 24 wine regions within 11 countries using a hedonic model. We assess the value of producer brands vs. geographical indicators, defining an indicator for high, average, and low quality producers (brands) within a region based on relative peer performance, i.e., whether they consistently produce qualities above or below their regional average. In contrast to high quality producers from France and Italy, their counterparts from the New World never exceed prices for high quality Napa Valley brands. Thus, New World wine still has to catch up with the Old World in terms of regional reputation, but leading brands are able to pick up much of the price differential. Generic promotions, export quality controls, and regional quality leaders emphasizing origin in their own marketing may level the playing field for laggard regions. [EconLit citations: D400, Q130, L140]. © 2006 Wiley Periodicals, Inc. Agribusiness 22: 363-374, 2006.

Suggested Citation

  • Günter Schamel, 2006. "Geography versus brands in a global wine market," Agribusiness, John Wiley & Sons, Ltd., vol. 22(3), pages 363-374.
  • Handle: RePEc:wly:agribz:v:22:y:2006:i:3:p:363-374 DOI: 10.1002/agr.20091

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    References listed on IDEAS

    1. Oczkowski, Edward, 2001. "Hedonic Wine Price Functions and Measurement Error," The Economic Record, The Economic Society of Australia, vol. 77(239), pages 374-382, December.
    2. Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb..
    3. Landon, Stuart & Smith, Constance, 1997. "The Use of Quality and Reputation Indicators by Consumers: The Case of Bordeaux Wine," MPRA Paper 9283, University Library of Munich, Germany.
    4. G¸nter Schamel & Kym Anderson, 2003. "Wine Quality and Varietal, Regional and Winery Reputations: Hedonic Prices for Australia and New Zealand," The Economic Record, The Economic Society of Australia, vol. 79(246), pages 357-369, September.
    5. Nerlove, Marc, 1995. "Hedonic price functions and the measurement of preferences: The case of Swedish wine consumers," European Economic Review, Elsevier, vol. 39(9), pages 1697-1716, December.
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    Cited by:

    1. Caracciolo, Francesco & D’Amico, Mario & Di Vita, Giuseppe & Pomarici, Eugenio & Dal Bianco, Andrea & Cembalo, Luigi, 2016. "Private vs. Collective Wine Reputation," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association (IFAMA), vol. 19(3).
    2. Charters, Steve & Spielmann, Nathalie, 2014. "Characteristics of strong territorial brands: The case of champagne," Journal of Business Research, Elsevier, vol. 67(7), pages 1461-1467.
    3. Corsi, Alessandro & Strøm, Steinar, 2013. "The Price Premium for Organic Wines: Estimating a Hedonic Farm-Gate Price Equation," Journal of Wine Economics, Cambridge University Press, vol. 8(01), pages 29-48, May.
    4. Carew, Richard C. & Florkowski, Wojciech J. & Meng, Ting, 2016. "Segmenting Wine Market: California Red and White Wine Retail Prices in British Columbia," 2016 Annual Meeting, July 31-August 2, 2016, Boston, Massachusetts 235253, Agricultural and Applied Economics Association.
    5. Monica Fait & Antonio Iazzi & Paola Scorrano, 2014. "La brand experience nelle strategie commerciali delle imprese vitivinicole," ECONOMIA E DIRITTO DEL TERZIARIO, FrancoAngeli Editore, vol. 2014(2), pages 285-304.
    6. Curtis, Kynda R. & Cowee, Margaret W. & Kim, Man-Keun & Harris, Thomas R., . "Evaluating Returns to Cool Season Grass Quality Characteristics for Niche Equine Feed Markets," Journal of Agribusiness, Agricultural Economics Association of Georgia.
    7. Mariarosaria Agostino & Francesco Trivieri, 2016. "European Wines Exports Towards Emerging Markets. The Role of Geographical Identity," Journal of Industry, Competition and Trade, Springer, vol. 16(2), pages 233-256, June.
    8. Agostino, Mariarosaria & Trivieri, Francesco, 2014. "Geographical indication and wine exports. An empirical investigation considering the major European producers," Food Policy, Elsevier, vol. 46(C), pages 22-36.
    9. 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), April.
    10. Günter Schamel, 2007. "Auction markets for specialty food products with geographical indications," Agricultural Economics, International Association of Agricultural Economists, vol. 37(2-3), pages 257-264, September.
    11. Cacchiarelli, Luca & Carbone, Anna & Esti, Marco & Laureti, Tiziana & Sorrentino, Alessandro, 2015. "Assessing the Value of Quality in the Italian Wine Market," 2015 Conference, August 9-14, 2015, Milan, Italy 211379, International Association of Agricultural Economists.
    12. Deselnicu, Oana C. & Costanigro, Marco & Souza-Monteiro, Diogo M. & McFadden, Dawn Thilmany, 2013. "A Meta-Analysis of Geographical Indication Food Valuation Studies: What Drives the Premium for Origin-Based Labels?," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 38(2), August.
    13. Cacchiarelli, Luca & Carbone, Anna & Esti, Marco & Laureti, Tiziana & Sorrentino, Alessandro, 2015. "Wine quality and prices: experts vs market," 143rd Joint EAAE/AAEA Seminar, March 25-27, 2015, Naples, Italy 202750, European Association of Agricultural Economists.
    14. repec:fan:mcmcmc:v:html10.3280/mc2017-001004 is not listed on IDEAS
    15. Teuber, Ramona, 2010. "Estimating the Demand for Sensory Quality – Theoretical Considerations and an Empirical Application to Specialty Coffee," Journal of International Agricultural Trade and Development, Journal of International Agricultural Trade and Development, vol. 59(3).

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