The price competitiveness off Hungarian wines in European Union markets

Bozsik, Norbert

In the case of homogeneous goods (corn, eggs, milk, etc.) the price differential between products is the strongest determinant of success in market competition. In these days, however, it is more and more the highly processed foodstuffs that land on the consumer’s table. Wine is one of these. This study appraises the price competitiveness of Hungarian wines on EU markets. The question is to what extent do price differences determine the competitiveness of wine on potential markets? Or does a lower price give a real advantage to a special product like wine? Or is the demand for a product due to factors other than price? Our findings show that most Hungarian wines, except bottled white quality wines, are compatible on EU markets as far as prices are concerned. However, the quantity of wine merchandised is at least as important as the price level. I tried combine the price level with the quantity merchandised and evaluate them together in terms of the so-called “quality competitiveness”. According to this approach bottled white quality wines came out to be competitive, because despite rising prices this was only category able to increase its market share. A price advantage over competitors does not necessarily mean increased competitiveness, which in the case of wines can only be explained by other less obvious reasons. It is important to emphasis that national averages are presented in this study, whereas brands, wineries and wine growing regions are present on the markets.

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