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French Wine and the U.S. Boycott of 2003: Does Politics Really Affect Commerce?

  • Orley Ashenfelter
  • Stephen Ciccarella
  • Howard J. Shatz

In early 2003, France actively tried to thwart the plans of the Bush administration to build international support for a war to depose Iraqi ruler Saddam Hussein. In response, calls in the United States for a boycott of French products, wine in particular, rebounded through all forms of media. In the spring of 2003, French business people even reported that the boycott calls were hurting their U.S. sales. Using a dataset of sales of nearly 4,700 individual wine brands, we show that there actually was no boycott effect. Rather, sales of French wine dipped for two reasons. First, they experience a cyclical peak at holiday time, from November through early January, and the boycott was called during the February to May period. Second, sales of French wine have been in a secular decline in the United States. Sales in February through May 2003 merely stayed on trend. We contrast our results with other recent work that has found evidence of a boycott effect but that omits the holiday effect from several specifications. French wine producers may be having economic problems, but it is not because of their government's foreign policy.

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File URL: http://www.nber.org/papers/w13258.pdf
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 13258.

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Date of creation: Jul 2007
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Publication status: published as Journal of Wine Economics / Volume 2 / Issue 01 / Spring 2007 pp 55-74 Copyright © American Association of Wine Economists 2007 DOI: http://dx.doi.org/10.1017/S1931436100000298 (About DOI), Published online: 08 June 2012
Handle: RePEc:nbr:nberwo:13258
Note: ITI LS POL
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  1. Bentzen, Jan & Smith, Valdemar, 2001. "Did the French Nuclear Tests under the Muroroa Atoll Affect the Export of French Wine to Denmark?," Working Papers 01-9, University of Aarhus, Aarhus School of Business, Department of Economics.
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