1. Factors Affecting Price - Supply & Demand

Question 1

What are the 4 factors that affect the demand for wine?

Answer 1

Social
Economic
Legislative
Political

Question 2

What 4 categories can the Social Factors be broken down into?

Answer 2

Changes in consumption habits
Changing customer preferences
Change in reputation
Changes in spending patterns

Question 3

What are the 5 reasons why wine consumption is falling

Answer 3

Younger people drinking less wine
Health concerns
Changes in lifestyle
Reduced availability of cheap wine

Question 4

What 3 categories can the Economic Factors be broken down into?

Answer 4

Strength of economy
Fluctuations in currency exchange
Changes to market

Question 5

What 5 categories can the Legislative Factors be broken down into?

Answer 5

Laws prohibiting or limiting the sale of alcohol
Government policies to reduce alcohol consumption
Taxation
International trade
Wine laws

Question 6

What are the 2 factors that affect the supply of wine?

Answer 6

Production

Legislation

Question 7

What 7 factors that impact production & therefore supply of wine?

Answer 7

Area under vine
Vine pull schemes
EU restrictions on planting new vineyards
Conversion of vineyard into other uses
Abandonment of rural area 
Human factors
Natural factors

Question 8

What are the challenges of oversupply

Answer 8

Prices fall
Harder to sell stock
Forced to sell at lower prices
Lower prices can devalue the brand

Question 9

What are the challenges of undersupply

Answer 9

Not enough to sell
Prices rising
Strained business relationships
Sell less as consumers move to cheaper alternatives

Question 10

What are the top 5 countries for wine consumption 2003-2019 ?

Answer 10

USA
France
Italy 
Germany
China

Question 11

When did USA over take France and Italy to become the country it’s the largest wine consumption?

Answer 11

2011

Question 12

What 2 countries are an example of a price sensitive market?

Answer 12

UK
Germany
They are unwilling to pay more than the lowest price possible for the style of wine they want to buy

Question 13

What country doesn’t fall into a price sensitive market?

Answer 13

USA

They are willing to pay above the minimum price for the style of wine they want to buy

Question 14

What are 5 examples of Geographic Indications (GIs)?

Answer 14

Protected Denominations of Origin (PDOs)
Protected Geographical Indications (PGIs)
Wine of South Africa/Australia
AOPs - France
DOC/DOCG -Italy

Question 15

When did the vine pull schemes start that helped tackle the surplus known as “wine lake”?

Answer 15

Mid-1980s

Question 16

When was Vin de Pays in France created and why?

Answer 16

1970s
The strict PDO rules led to complaints by producers that were not able to compete with their counterparts in less heavily-regulated regions