This issue of the Journal of Wine Economics begins with “Modeling Global Wine Markets to 2018: Exchange Rates, Taste Changes, and China’s Import Growth” by Kym Anderson and Glyn Wittwer. Their analysis employs an econometric model based on 2007–2011 data, to forecast a range of likely global wine market scenarios for the next five years. The authors compute a range of alternative simulations for different real exchange and economic growth rates. In addition to finding a continuing trend toward premium wines, all scenarios also suggest that “China’s place in global wine markets is likely to become increasingly more prominent. . . . Not all segments of the industry are projected to benefit, with nonpremium producers facing falling prices if demand for their product continues to dwindle as projected above. But those exporting firms willing to invest sufficiently in building relationships with their Chinese importer/distributor – or in going into grape growing or wine making within China, may well enjoy long-term benefits from such investments.”

In this paper, we use a revised, expanded, and updated version of a global model first developed by Wittwer et al. (2003) to project the wine markets of its 44 countries plus seven residual country groups to 2018. Because real exchange rate (RER) changes have played a key role in the fortunes of wine market participants in some countries in recent years, we use the model to analyze their impact, first retrospectively during 2007–11 and then prospectively during the period to 2018 under two alternative sets of RERs: no change, and a halfway return to 2009 rates. In both scenarios, we assume a return to the gradual trend toward premium wines and away from nonpremium wines. The other major development expected to affect the world’s wine trade is growth in China’s import demand. Alternative simulations provide a range of possibilities, but even the low-growth scenario suggests that China’s place in global wine markets is likely to become increasingly prominent. (JEL Classifications: C53, F11, F17, Q13)

Winemaking is a highly complex technology. It needs inputs over which there is no control (good weather conditions), initial endowments which can hardly be modified (soil, exposure of the slopes), inputs which take 20 to 30 years before producing good quality outputs (vines), manual operations (picking), mechanical operations (crushing, racking) and chemical processes (during fermentation). In the paper, we disentangle the production technology, and try to quantify the impact on prices (qualities) of each of the many inputs (including weather conditions) and steps used in producing wine in Médoc. We show that technology and weather conditions are able to explain two thirds of the variance of prices; when reputation effects (based on the wine classification made in 1855) are included, this proportion rises to almost 85%. This suggests either that “classified” producers are able to charge higher prices, or that the classification is a measure of quality reflected by prices. We also show that two of the more recent attempts at classifying wines are not as good at explaining prices than the official (and old) 1855 classification. (JEL Classification: L66, Z19, C5, D4)

This paper investigates reversals in wine auction prices following a series of strong positive and negative returns. Using the Chicago Wine Company’s auction data, we find evidence of reversals after extreme wine price changes. There is a clear asymmetry in the market reaction to wine price increases and declines. Wine price declines after strong price increases are not, in general, as significant as wine price increases after strong price declines. The strongest reversal occurs for wines that have declined in price by more than 30 percent. (JEL Classifications: D44, G14)

Intangible assets can play a strategic role in the implementation of differentiated strategies in foreign markets. The literature has addressed the impact of intangible assets on both exports and financial performance and the effects of exports on company financial performance (profit and risk). This article aims to analyze the effect of exports on the relationship between intangibles and company performance in the wine industry. Empirical studies show that intangibles have a positive but diminishing impact on exports. The effect of exports on financial performance differs depending on whether we consider corporations or cooperatives. While intangible expenses reduce company risk in both samples whatever the level of export intensity, the effects are different with profit. In corporations, intangible expenses have a positive impact on profit only when there is a high level of expenses and a high level of export intensity. (JEL Classifications: G32, L25, Q12, Q13)

This paper examines the level of consensus, or agreement, among the wine quality ratings of six prominent wine critics for seven consecutive vintages of red Bordeaux. Consensus, a critical component of expertise in wine evaluation, has important implications for consumers’ reliance on critics’ ratings in deciding which wines to purchase or consume. The principal analyses focus on a core set of wines in each year that were rated by all six critics. Additional analyses concern differences in agreement for classified growths vs. nonclassified growths and for critics of different nationalities (American, British, and French). The level of consensus among these prominent critics is contrasted with that among both wine professionals who are not prominent critics and professionals from several other fields. (JEL Classification: C93)