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WSET Level 4 D2 Wine Business > Factors that Affect the Price of a Bottle of Wine -- Supply and Demand > Flashcards

Factors that Affect the Price of a Bottle of Wine -- Supply and Demand Flashcards

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1
Q

What factors influence the demand for wine?

A

Social Factors
Economic Factors
Legislative and Political Factors

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2
Q

What factors influence the supply of wine?

A

Production
Legislation

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3
Q

What social factors influence the demand for wine?

A

Changes in consumption habits (e.g. younger people drinking less wine, health concerns, changes in lifestyle, reduced availability of cheap wine)
Changing consumer preferences
Changes in reputation
Changes in spending patterns

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4
Q

What economic factors influence the demand for wine?

A

Strength of the economy
Fluctuations in currency exchange
Changes to the market

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5
Q

What legislative and political factors influence the demand for wine?

A

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

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6
Q

What production factors influence the supply of wine?

A

Area under vine
Vine pull schemes
EU restrictions on planting new vineyards
Conversion of vineyard land to other uses
Abandonment of rural areas
Human factors — more grapes, less area
Natural factors — weather, climate

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7
Q

What is the main legislative influence on the supply of wine?

A

The increasing number of Geographical Indications (GIs) around the wine world. All of these define where grapes for wines with specific geographical names can be grown.

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8
Q

What are the challenges of an over-supply of wine?

A

Downward pressure on prices
Consumers moving to cheaper alternatives
Moving into new markets
Creation of less expensive ‘alternate’ labels
Devaluation of the brand

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9
Q

What are the challenges of an under-supply of wine?

A

Strained business relationships due to lack of product
Allocation of wines in most cases
Price increases possible
Alternate products might be found

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10
Q

What are some human factors that influence the supply of wine?

A

Improved production techniques
Relaxation of laws that may limit supply (e.g. irrigation)

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11
Q

What are some natural factors that influence the supply of wine?

A

Weather conditions
Climate conditions

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WSET Level 4 D2 Wine Business (6 decks)

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