Overview Wine Production in Germany
Although grapevines have been cultivated in present day Germany since Roman times (e.g., Bassermann-Jordan, 1907), compared to European wine growing nations such as France, Italy, and Spain, Germany has never been a major wine producing country. Its geographical location between the 48th and 54th parallel and the resulting marginal climate restricts grape growing to the valleys of the Rhine river and its tributaries Ahr, Mosel, Nahe, and Main in the south-west. In addition, some professional viticulture, though at a much smaller scale, can also be found in the valleys of the Saale-Unstrut and the Elbe river in the eastern part of present day Germany (see Figure GER-1).
However, Germany in its current borders has only existed since 1990, when West and East Germany reunified (depicted in dark gray in Figure GER-1). At one time or another, a few other viticultural regions belonged to what was then called Germany (in light gray in Figure GER-1). The most significant one was certainly Alsace-Lorraine, which was part of the German Empire between 1871 and 1918, and, in some years, accounted for as much as a third of the entire German wine production. Similarly significant was the merger with Austria, which joined Nazi- Germany in 1938, and became the province Reichsgau Ostmark until 1945. A few somewhat smaller wine growing regions in Posen and Silesia (e.g., Zielona Góra, German Grünberg), now Poland, once belonged to Prussia and, before 1818, were virtually the only domestic wine suppliers within the Kingdom.
This study refers to Germany within its present day borders and all figures for “German wine production” will exclude Alsace-Lorraine, the Polish regions, and Austria by re-aggregating the production data of the official statistics.
The California Grape Crush Report includes summaries of quantities produced and estimates of the average prices and value of wine grapes crushed in California, and serves as an authoritative source of information on production and returns per ton by variety of wine grapes. The data provided in the Crush Report are used to calculate the total value of winegrape production as reported in the annual Agricultural Statistics reports published by the United States Department of Agriculture and in major industry publications. We use the differences among crush districts in the shares of production crushed to growers’ accounts to show that the current mechanism of calculating average statewide returns per ton understates the true total value of the crush by 4–16 percent. We show that a more accurate estimate of the total value and average price can be obtained if the prices of the wine grapes that are sold are used to infer the prices of wine grapes that are not sold before computing the weighted averages.
French Oak barrels are considered a vital input for the finest wines, and comprise a very large portion of wine production costs. Wineries in the United States purchase French oak barrels priced in Euros, and have the opportunity to pay for their barrels early, in April, with a discount or in September with no discount. Given the inherent complexities in fluctuating exchange rates and limited resources of the average winery, little consideration has been placed on this purchasing decision despite potentially large cost implications.
The present work analyzes historical and barrel-specific data over the last fifteen years to find a huge monetary advantage to early purchasing and obtaining the price discount, even accounting for exchange rate volatility and opportunity costs. Barrel-specific prices were obtained from Continuum Estate in Napa, California, though the authors provide detailed analysis and a broader interpretation to aid in practical decisions of typically structured wineries in the United States.
Early purchasing of French oak barrels over the past fifteen years, accounting for lost interest, would have decreased average winery costs by over $60,000 as compared to paying upon delivery. For larger producing-wineries, this savings is even more pronounced.
This is the first paper to investigate the existence of an optimal decision rule regarding the purchasing of wine barrels, a vital input to wine production. This is of interest to not only those involved in the growing industry of wine-making, media and wine connoisseurs, but also to any similarly structured firm facing early commitments at a reduced price.
We conduct a choice experiment where the number of labels vertically differentiating Chianti wines (Chianti, Chianti Classico, Chianti Classico Riserva, Chianti Classico Gran Selezione) is augmented incrementally in a between-subject design, eliciting both quality perceptions and wine choices. We find that quality expectations are endogenous to the labeling regime, and adding a high-quality label (e.g., Chianti Gran Selezione) decreases the perceived quality of all other Chianti wines (comparative stigma). A model conditioning on subjective quality perceptions with heterogeneous WTP for quality is then proposed, and estimated via random parameter multinomial logit. The endogeneity problem arising from using subjective beliefs as regressors is addressed by means of a control-function approach. Results are compared to reduced form approaches where the marginal utility of quality and subjective perceptions are confounded in a single label-specific estimate, and the model is used to determine how much of the cannibalization observed after introducing higher-tier quality standards is attributable to restructuring of perceptions and comparative stigma.
Employing resource-based perspectives of the firm as a theoretical foundation, this article empirically examines the relationship between women in two different types of leadership roles and environmentally sustainable firms. I study an unbalanced panel data set of 2,006 wine firms in Australia for the period 2007–2014. The results suggests that when accounting for their individual, independent effects, women in technical leadership roles are positively associated with environmental sustainability, while women in professional leadership roles are not. However, the potential complementarities of women in both roles are explored, their interactive, co-joint (complementary) effect explains significantly more variance in the environmental sustainability variable than their individual effects. The results are discussed along with limitations and directions for future research.
Wine production in Québec over the last twenty years has grown rapidly with an increased interest for diversified products in terms of quality and price. The growth of supply is related not only to the number of producers but also to the increased varieties of wines proposed. This paper proposes an economic analysis of wine production in Québec by analyzing the concentration level of producers. The level of competition has increased significantly between 2008 and 2105 due to an increasing number of small wine producers. An index of relative firm position in the market based on relative prices is calculated and we demonstrate that a high price strategy is significantly related to the size of the vineyard rather than the age of the domain or the number of wines produced.
There is much debate on the impact of product and process standards on trade. The conceptual arguments are complex and empirical evidence is mixed. We analyze the impact of standards and tariffs on the dramatic rise and fall of the raisin trade between France and Greece in the course of 25 years at the end of the 19th century. The case illustrates how product standards can be used to address consumer concerns and to protect producer interests. Economic conditions and French policies first stimulated Greek raisin imports. Later, changing conditions and political pressures led to the introduction of tariffs and wine standards which caused major declines in Greek exports and ultimately the bankruptcy of the Greek economy. Interestingly, this trade episode of more than a century ago still has a regulatory legacy today as it is the origin of the EU’s definition of wine.
While one cannot speak of sustained French immigration to the American colonies, some notable examples can be cited. The Labadists were mystics who lived communally on their 4,000 acre Maryland farm. There were the French settlers of Gallipolis in Ohio who, it appears, produced a wine so poor in quality it was named méchant Suresne after a wine known for its sourness produced near Paris. The arrival of French Huguenots in South Carolina is of particular interest because, for the first time, a large group of settlers reached the New World with the primary aim of growing grapes. They had left France for England to escape religious persecution and in 1763 petitioned the British Government to provide them with land in South Carolina so that they could “apply themselves to the cultivation of vines and of silk.” The request was approved. Setting sail a year latter, the Huguenots reached South Carolina founding the township of New Bordeaux in the southern part of the colony. They were joined four years later by another group of co-religionists lead by the forceful Louis de Mesville de Saint Pierre. But now came a setback. The colony’s governing body refused to provide the settlers with the funds needed to purchase vine cuttings. Saint Pierre thereupon decided to return to England and appeal for financial aide to Lord Hillsborough secretary for the American Colonies, but to no avail.
The 1860–1970 period is a particularly interesting period to study wine trade because of dramatic changes in the wine markets and trade over the course of a century. The dramatic changes in trade flows were caused by both “nature” and “men”. Mediterranean wine trade represented around 90% of global wine trade and France was the world’s leading exporter. The arrival of Phylloxera devastated French vineyards and stimulated Spanish and Italian wine exports. When French wine production recovered, French winegrowers pressured their government to intervene, resulting in high tariffs on Spanish and Italian wines and Greek raisins. The protectionist trade regime contributed to the bankruptcy of Greece and to the substitution of wine trade from Spain and Italy to France’s North African colonies. When Algeria, Morocco and Tunisia became independent, France imposed high wine tariffs, effectively killing their wine exports. The decline of the wine industry in North Africa coincided with the trade and policy integration of the South European wine exporters in the EEC—the predecessor of the EU.
This study examines features of regional clusters and environmental sustainability among member firms. By studying a sample of 646 firms across four regional wine clusters in Australia, the evidence suggests regiona l export intens it y is positive ly associat ed wit h implementation rates of environmentally sustainable practices. Further, as women in leadership roles (as a proxy for social proximity) grow within regional clusters, this strengthens the relationship between export intensity and environmental sustainability. The results advance research on the features of regional clusters that are expected to influence the adoption of organiza tio na l practices among member firms. Conclusio ns are presented along with limitations and future research opportunities.