The Evaluation of Competitiveness of Wine Trade in Traditional and New World Wine Exporter Countries

Balogh, Jeremiás Máté

Keywords: revealed comparative advantage, wine industry, factors of competitiveness, Q37

In the past two decades the New World wine producer countries have increased their export share of the world wine market, causing several remarkable changes in this market. The New World wine producers are becoming more competitive for the reason that they are more economically efficient due to the geographical and climatic conditions, and technical efficiency. The European Union has responded to this challenge by introducing a new reform of the Common Agricultural Policy aimed at improving the profitability of the wine industry by reducing production costs, increasing value added and promoting the participation of farmers in food quality schemes. These changes motivated me to investigate the factors influencing the wine competitiveness in traditional and New World producer countries.
The purpose of this research is to provide an insight into the export competitiveness of the wine trade of 31 wine producer countries on world wine markets. Four revealed comparative advantage indices are used to analyse the levels, evolutions in patterns of development in the export competitiveness of wine and their drivers over the period 2000-2012. The results show that GDP has negative effects on the wine export competitiveness, while GDP per capita, land area, grape area harvested and the population density are positively associated with comparative advantages.