1. Wine Economics Stefano Castriota

2. Structure of the book _______________________________________________
First part: how the market works (Economics)
Second part: what institutions and consortia can do to avoid market failures (Economic Policy)
Policy conclusions: six key variables to survive the wine war

3. The World wine market after the '60s _______________________________________________
The wine geography changed
Until the '60s the Western Meditteranean dominates. Afterwards …
Collapse of per-capita consumption in Mediterranean Europe
Aggressive entry of New World producers
Decline of important producers like North Africa and Mediterranean Europe

4. World consumption of wine (million hl) _______________________________________________

5. World wine production (% of Hl) _______________________________________________

6. World production of wine by country (% of hl, 1961) _______________________________________________

7. World production of wine by country (% of hl, 2011) _______________________________________________

8. Convergence in consumption models _______________________________________________
Convergence involved:
1. The quantities (liters of pure alcohol drank)
2. The preferences (towards the different alcoholic beverages)
Similar patterns not only in Europe (North vs. South), but also among continents
Problems for Italy/Southern Europe:
1. Population is almost constant
2. We are mainly wine producers

9. Consumption of alcohol in Europe (L
Consumption of alcohol in Europe (L. of pure alcohol) _______________________________________________

10. Alcohol consumption in Europe, N-S (L
Alcohol consumption in Europe, N-S (L. of pure alcohol) _______________________________________________

11. % of alcohol consumption due to wine in Europe _______________________________________________

12. Differences Old-New World _______________________________________________
In Old World countries there are smaller economies of scale
Strengths of New World countries:
- Adoption of new technologies on a large scale
- Lower costs/lower prices
Weaknesses of New World countries:
- (Almost) no native grape varieties
- Less history and tradition
Cooperatives

13. The six key variables (Old World) _______________________________________________
Quality  DOP rules, cooperatives, R&D
Marketing and clear wine classification system  Pyramid and No. DOPs
Economies of scale and competitive prices  Incentives to M&A
Promotion of wine culture  Wine education and tourism
Changes to the tax system  More excise duties, less VAT
No. of native grape varieties (?)

14. Native (wine) grapes, by country _______________________________________________
Italy
341
Portugal
268
France
187
Greece
159
Spain
119
Croatia 92
Germany 40
Hungary 18

15. Thanks!