Globalization and national commodity cycles: The case of wine in Australia

Kym Anderson

Departmental Working Papers from The Australian National University, Arndt-Corden Department of Economics

Abstract: Globalization may have reduced but certainly has not eliminated differences in national commodity cycles. This article examines the case of Australia s wine industry. Over the past four decades, all annual indicators of that industry s international competitiveness have traced a steep inverted V. This paper draws on recently compiled data to first summarize such indicators and contrast them with those of other key wine-exporting countries. It then offers a series of partial explanations for the industry s sharp rise and then equally steep fall in its international competitiveness (and its several bumps along the way). The New Zealand and Californian wine industry s prolonged expansions in particular are contrasted with Australia s. Despite the current downturn in the industry s fortunes, and notwithstanding the likelihood of further boom-slump cycles in the decades ahead, the paper concludes that a return to profitability is possible if vignerons and wine exporters were to raise their current rates of investments in R&D, quality improvements and promotion, and if the AUD remains relatively weak.

JEL-codes: D12 F15 L66 N10 (search for similar items in EconPapers)
Pages: 42 pages
Date: 2024
New Economics Papers: this item is included in nep-agr, nep-cul and nep-int
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Persistent link: https://EconPapers.repec.org/RePEc:pas:papers:2024-10

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