Factors that Influence the Supply of Wine

Question 1

What percentage of vys are used for wine production?
And which country’s vys are mostly used for table wines?

Answer 1

90%
China

Question 2

What was the vine pull scheme?

Answer 2

-Mid 1980s- EU wine production much greater than demand- ‘wine lake’
-Gov and EU paid growers to pull up poor quality wines
-several hundred thousand hectares European vines pulled up

Question 3

What has changed about the EU restrictions on planting new vys?

Answer 3

-since 2016- member states now able to authorise planting of up to an annual growth of 1% of vy area already planted

Question 3

Give examples of places that have made conversions of vy land to other uses

Answer 3

-switch to higher vaue products
-Elgin- apples= greater financial return than grapes
-USA- almonds and pistachios
-Madeira- property development, tourists
-Santa Clare Valley, Cali- business

Question 4

Abandonment of rural areas- explain

Answer 4

-younger people leaving rural areas—> urban
-reducing workforce/leaving family run estates with no one to take them over

Question 5

Explain how natural factors can affect supply of wine

Answer 5

-weather conditions- small/large harvest
-europe particularly susceptible- bad vintages major impact on global wine production
-2017= devastating spring frosts/hail/severe heat waves= 14% fall in production compared to 2016
-South Africa/California= drought
-Chilean gov estimates 95% of country’s vy area shortage of irrigation water by 2050
-reduced yields= lower production= shortage in supply= higher prices. Customers not always willing to pay, especially if bad weather= drop in quality

Question 6

Give an example of how a human factor can affect supply of wine

Answer 6

-eg Spain- av yields increased despite area under vine decreasing
=relaxation of irrigation laws- areas that weren’t able to support vines, now viable
-modern techniques- clonal selection etc

Question 7

What is the main legislative influence on supply of wine?

Answer 7

Increasing number of GIs

Question 8

What do PODs do?

Answer 8

-dictate what grapes grown in that area
-max yields
-wm/maturation techniques

Question 9

What are the aims of GIs?

Answer 9

1. Bring supply and demand more in line- reduce risk of downwards price pressure
   -eg if retailers market research showed that large number of customers wanted cheap savy B from around the world, can switch country of origin from one year to the next to get cheapest price
   -but if wanted to buy Martinborough savy b, retailer constrained to buy from smaller area in NZ= producer has more control over price- retailer cannot source from anywhere else
2. Define style of wine produced in particular region

Question 10

Give an example of what a PDO can do where demand for particular wine is rising

Answer 10

-pressure to extend permitted production area- eg Prosecco DOC
-allows vys to be planted and increase in production, but dilution in overall quality

Question 11

Give 2 examples of PDOs governing body and what do they enforce?

Answer 11

-Comite Champagne and Sherry Consejo Regulador
-limit amount of wine released in any one year= ensuring market not over supplied and maintaining price levels

Question 12

What are Vin de Pays?

Answer 12

european PGI system= greater freedom
- still require 85% of grapes to come from particular geographical area, but permit wider range on varieties, and don’t have rules on viticulture and wm
-PGIs v important- production and quality increased considerably

Question 13

What are the factors that influence the supply of wine?

Answer 13

-area under vine
-vine pull schemes
-EU restrictions on planting new vys
-conversion of vy land to other uses
-abandonment of rural areas
-human factors
-natural factors
-legislation