AAWE, Economics Dept, New York University, 19 W 4th St, 6Fl., New York NY 10012aawe@wine-economics.org

AAWE Working Paper No. 193 – Economics

“Tested Quality in the Glass”: Wine Quality Certification In Germany

Henrich Brunke, James T. Lapsley, Rolf A.E. Mueller & Ludwig Tauscher

Abstract

Wine is mostly sold in closed bottles that prevent buyers from inspecting their contents. This practice turns wine into an experience good which buyers are unable to asses at the time of purchase. In order to reduce buyers’ information gaps, wine sellers provide information about the wine on one or several labels attached to the bottle. Wine buyers’ problem then is to interpret this information and to assess its veracity. Institutional arrangements have emerged in Germany, as in other wine producing countries, that standardize communication between wine sellers and buyers, and that reduce the risk of wine buyers being misled by the information provided by the sellers. Core elements of the institutions are (i) verifiable wine quality categories or grades, (ii) wine examination by independent experts and certification of the information items provided by the wine bottler, and (iii) rules for the content and form of labeling information. Wines that satisfy all legal requirements for a quality wine are deemed to be “Tested Quality in the Glass”. They are recognizable by a number that is issued for each wine that has passed examination; the number must be printed on the label. The objectives of this study are three: (i) to provide an English-language description of the German wine quality certification system, together with a summary of its legal basis; (ii) to describe an alternative private wine certification system that has been grafted onto the pubic system, and (iii) to encourage readers to think about how datafication of wine and digitization of wine certification may transform the “Tested Quality in the Glass” system. The study is of interest to all wine experts and scholars with an interest in wine certification, especially of German wines.

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