“Global Wine Wars: New World Challenges Old”
As you are thinking about the answers to these questions, keep in mind there is an entire value chain to consider: grape growing and wine making on the supply side, and marketing and distribution influencing the demand side.
1. Briefly describe the changing economic geography of the global wine industry in terms of production, distribution and consumption.
2. How did the French become dominant competitors in the global wine industry early on and maintain it for centuries? In other words, what explains France’s “old world” dominance in this industry?
3. What theory or theories of trade best explain the French wineries’ ability to develop their industry of wine in the 18th century?
4. What changes in the global industry structure and competitive dynamics led the U.S. and Australian producers to gain market share to challengers from France and other “Old World” countries in the late 20th Century? What trade or other theories best explain this process?
5. What measures taken in the Old World could be considered protectionist? Who were the winners? Who were the losers? What protection existed in the wine industry in the New World?
6. Recognizing that market growth in the New World was helping establish the new entrants, why did the French producers not become much more effective exporters during the seventies and eighties? Are they back in the global wine network today? If so, in what ways; if not, what are they missing?