What explains changes in grape varietal mixes in Australia’s wine regions?

German Puga () and Kym Anderson
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German Puga: Wine Economics Research Centre, School of Economics and Public Policy, University of Adelaide, Australia

No 2023-04, Wine Economics Research Centre Working Papers from University of Adelaide, Wine Economics Research Centre

Abstract: In an ever-more-competitive global beverage market, vignerons compete for the attention of consumers by trying to differentiate their wine from others while also responding to technological advances, climate change, and evolving demand patterns. In doing so, they highlight their regional and varietal distinctiveness while keeping an eye on changes in consumer preferences for different varieties. This paper examines and seeks to explain the extent to which winegrape varietal mixes vary across regions and over time within Australia and relative to the rest of the world. It reports changes in indexes of similarity across regions, and indexes of concentration in the winegrape varietal mix within regions. Nationally the varietal mix has become less differentiated and closer to that of France and the world as a whole. However, individual regions within Australia are becoming more concentrated in their mix of varieties and more differentiated from other Australian regions. We estimate supply response models based on a Nerlovian adaptive profit expectations and partial acreage adjustment framework. These models do not provide insights into many of the variables influencing vignerons’ planting decisions, but they help explain recent changes in varietal mixes. The results suggest changes in varietal mixes are more motivated by expected revenues than by what may work best based on the climate of each region. In the wake of climate change and global wine demand premiumizing, some Australian vignerons may find their region is too warm for producing high-quality wine with the winegrape varieties planted there.

Keywords: grape cultivar; winegrape concentration; winegrape similarities; supply response; acreage response; Nerlovian adaptive expectations and partial adjustment model; climate change (search for similar items in EconPapers)
JEL-codes: D24 L66 Q13 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2023-11
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Persistent link: https://EconPapers.repec.org/RePEc:adl:winewp:2023-04

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