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A Model of Global Beverage Markets

Author

Listed:
  • Glyn Wittwer

    (Centre of Policy Studies, Victoria University, Australia)

  • Kym Anderson

    (Wine Economics Research Centre, School of Economics, University of Adelaide, Australia, and Arndt-Corden Dept of Economics, Australian National University, Canberra ACT 2601, Australia)

Abstract

This paper describes a new empirical model of the world's markets for alcoholic beverages and, to illustrate its usefulness, reports results from projections of those markets from 2016- 18 to 2025 under various scenarios. It not only revises and updates a model of the world's wine markets (Wittwer, Berger and Anderson, 2003) but also adds beer and spirits so as to capture the substitutability of those beverages among consumers. The model has some of the features of an economywide computable general equilibrium model, with international trade linking the markets of its 44 countries and seven residual regions. It is used to simulate prospects for these markets by 2025 (business-as-usual), which points to Asia's rise. Then two alternative scenarios to 2025 are explored: one simulates the withdrawal of the United Kingdom from the European Union (EU); the other simulates the effects of the recent imposition of additional 25% tariffs on selected beverages imported by the United States from several EU member countries. Future applications of the model are discussed in the concluding section.

Suggested Citation

  • Glyn Wittwer & Kym Anderson, 2020. "A Model of Global Beverage Markets," Wine Economics Research Centre Working Papers 2019-05, University of Adelaide, Wine Economics Research Centre.
  • Handle: RePEc:adl:winewp:2019-05
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    File URL: https://media.adelaide.edu.au/economics/papers/winedoc/winewp2019-05.pdf
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    References listed on IDEAS

    as
    1. Kym Anderson & Giulia Meloni & Johan Swinnen, 2019. "Global Alcohol Markets: Evolving Consumption Patterns, Regulations, and Industrial Organizations," World Scientific Book Chapters, in: Kym Anderson (ed.), The International Economics of Wine, chapter 26, pages 671-712, World Scientific Publishing Co. Pte. Ltd..
    2. Kym Anderson & Glyn Wittwer, 2019. "Modeling Global Wine Markets to 2018: Exchange Rates, Taste Changes, and China’s Import Growth," World Scientific Book Chapters, in: Kym Anderson (ed.), The International Economics of Wine, chapter 3, pages 51-90, World Scientific Publishing Co. Pte. Ltd..
    3. Bloom, Nicholas & Bunn, Philip & Chen, Scarlet & Mizen, Paul & Smietanka, Pawel & Thwaites, Gregory, 2019. "The impact of Brexit on UK firms," Bank of England working papers 818, Bank of England.
    4. Hassan, Tarek Alexander & Hollander, Stephan & Tahoun, Ahmed & van Lent, Laurence, 2019. "The Global Impact of Brexit Uncertainty," CEPR Discussion Papers 14253, C.E.P.R. Discussion Papers.
    5. Sampson, Thomas, 2017. "Brexit: The Economics of International Disintegration," CEPR Discussion Papers 12301, C.E.P.R. Discussion Papers.
    6. Anderson, Kym, 2020. "Consumer Taxes on Alcohol: An International Comparison over Time," Journal of Wine Economics, Cambridge University Press, vol. 15(1), pages 42-70, February.
    7. Swati Dhingra & Hanwei Huang & Gianmarco Ottaviano & João Paulo Pessoa & Thomas Sampson & John Van Reenen, 2017. "The costs and benefits of leaving the EU: trade effects," Economic Policy, CEPR;CES;MSH, vol. 32(92), pages 651-705.
    8. Hertel, Thomas, 1997. "Global Trade Analysis: Modeling and applications," GTAP Books, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University, number 7685, March.
    9. Kym Anderson & Vicente Pinilla, 2017. "Annual Database of Global Wine Markets, 1835 to 2016: Methodology, Derived Indicators, and Sources," Wine Economics Research Centre Working Papers 2017-04, University of Adelaide, Wine Economics Research Centre.
    10. Anderson, Kym & Wittwer, Glyn, 2018. "Cumulative Effects of Brexit and Other UK and EU27 Bilateral FTAs on the World's Wine Markets," CEPR Discussion Papers 12621, C.E.P.R. Discussion Papers.
    11. Thomas Sampson, 2017. "Brexit: The Economics of International Disintegration," Journal of Economic Perspectives, American Economic Association, vol. 31(4), pages 163-184, Fall.
    12. Mark Horridge, 2011. "The TERM model and its data base," Centre of Policy Studies/IMPACT Centre Working Papers g-219, Victoria University, Centre of Policy Studies/IMPACT Centre.
    13. Thomas Sampson, 2017. "Brexit: The Economics of International Disintegration," CESifo Working Paper Series 6668, CESifo.
    14. Sampson, Thomas, 2017. "Brexit: the economics of international disintegration," LSE Research Online Documents on Economics 86591, London School of Economics and Political Science, LSE Library.
    15. Thomas Sampson, 2017. "Brexit: the economics of international disintegration," CEP Discussion Papers dp1499, Centre for Economic Performance, LSE.
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    Citations

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    Cited by:

    1. Wittwer, Glyn & Anderson, Kym, 2021. "COVID-19 and Global Beverage Markets: Implications for Wine," Journal of Wine Economics, Cambridge University Press, vol. 16(2), pages 117-130, May.
    2. Glyn Wittwer & Kym Anderson, 2021. "COVID‐19’s impact on Australian wine markets and regions," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 65(4), pages 822-847, October.
    3. Glyn Wittwer, 2021. "Expanding the Global Bev Model to enhance analysis of trade policy, COVID impacts and other wine industry issues," Wine Economics Research Centre Working Papers 2021-05, University of Adelaide, Wine Economics Research Centre.
    4. Deborah C. Peterson & Lin Crase, 2021. "Disaster, disruption, recovery and resilience: lessons from and for agricultural and resource‐based industries," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 65(4), pages 767-775, October.
    5. Glyn Wittwer, 2021. "Expanding Global Bev to enhance analysis of trade policy, COVID impacts and other wine industry issues," Centre of Policy Studies/IMPACT Centre Working Papers g-319, Victoria University, Centre of Policy Studies/IMPACT Centre.
    6. German Puga & Alfinura Sharafeyeva & Kym Anderson, 2022. "Explaining Bilateral Patterns of Global Wine Trade, 1962-2019," Wine Economics Research Centre Working Papers 2022-03, University of Adelaide, Wine Economics Research Centre.

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    More about this item

    Keywords

    CGE modeling; wine; beer; spirits; changes in beverage preferences; international trade in beverages; premiumization of alcohol markets;
    All these keywords.

    JEL classification:

    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • F17 - International Economics - - Trade - - - Trade Forecasting and Simulation
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness

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