Global Wine Wars Essay

2235 WordsApr 23, 20139 Pages
1. Briefly describe the changing economic geography of the global wine industry in terms of production, distribution and consumption. The Global wine industry has undergone a monumental change in terms consumer demand and more importantly in the ways it is produced and sold. The consumption, distribution and production has migrated away from the restrictions and regulations of the Old World to the New World ways of smart marketing, branding and serving to customers preferences. Middle ages emerged as the time when Europe served as the niche market for premium wine. But by and larger grape growing and wine making gradually became a fragmented business. Up to mid 20th century, wine was predominantly produced in European countries…show more content…
It soon became home to premium and super premium wines. The standards and quality of the wines produced helped France gain a reputation in global wine industry. France beat easily other countries in terms of import value. Lastly, French producers were able to increase production and expand into the global market, as they took advantage of the fact that they were the first to experience technology and innovations such as glass bottles, pasteurization and so on. 3. What theory or theories of trade best explain the French wineries’ ability to develop their industry of wine in the 18th century? The trade theory that best explains the development of wine industry in France is “mercantilism”. Traditionally, wine was sold in bulk to merchant traders- négociants in France. Another trade theory was “Absolute advantage” to some extent. By mid 18th century grape growing and winemaking supported 1.5 million families and an equal number in wine related businesses. It was the country’s second largest export. France, as an early entrant into the wine industry, accrued First-mover advantages by becoming the first niche market for premium wines and thus gaining Economies of Learning. The French government defined regulations and boundaries and codified them under the Appellation d’Origin Controllée (AOC) laws of 1935. These set the standards for vineyards and wine makers in terms of varieties yields required growing practices and so on. Later, other wine regions of France

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