Wine Export Shocks and Wine Tax Reform in Australia: Regional Consequences Using an Economy-Wide Approach

Kym Anderson, Ernesto Valenzuela and Glyn Wittwer

Chapter 20 in The International Economics of Wine, 2019, pp 479-503 from World Scientific Publishing Co. Pte. Ltd.

Abstract: We provide economy-wide modelling results of the national and regional implications of two current challenges facing the Australian wine industry: a decline in export demand, and a possible change in the tax on domestic wine sales following the Henry Review of Taxation. The demand shock causes regional GDP to fall in the cool and warm wine regions, but not in the hot wine regions unless the shock is large. A change from the current ad valorem tax to a similarly low volumetric tax on domestic wine sales causes regional GDP to rise in the cool and warm wine regions, partly offsetting its fall due to the export demand shock, but GDP in the hot wine regions would fall substantially. The switch to a volumetric tax as high as the standard beer rate would raise tax revenue and lower domestic wine consumption by more than onethird. However, it would induce a one-third decrease in production of non-premium wine as its consumer price would rise by at least threequarters (while the average price of super premium wines would change very little). This would exacerbate the difference in effects of a tax reform on GDP in hot versus warm and cool wine regions.

Keywords: Wine Globalization; Australia's Wine Internationalization; Wine Markets in Asia; Wine Price Distortions; Modelling Global Wine Markets (search for similar items in EconPapers)
JEL-codes: L66 O13 (search for similar items in EconPapers)
Date: 2019
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.worldscientific.com/doi/pdf/10.1142/9789811202094_0020 (application/pdf)
https://www.worldscientific.com/doi/abs/10.1142/9789811202094_0020 (text/html)
Ebook Access is available upon purchase.

Related works:
Journal Article: Wine Export Shocks and Wine Tax Reform in Australia: Regional Consequences Using an Economy‐wide Approach (2011)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wsi:wschap:9789811202094_0020

Ordering information: This item can be ordered from

Access Statistics for this chapter

More chapters in World Scientific Book Chapters from World Scientific Publishing Co. Pte. Ltd.
Bibliographic data for series maintained by Tai Tone Lim ().