Hostname: page-component-cd9895bd7-mkpzs Total loading time: 0 Render date: 2024-12-26T10:39:45.293Z Has data issue: false hasContentIssue false
  • English
  • Français

COVID-19 and Global Beverage Markets: Implications for Wine

Published online by Cambridge University Press:  04 October 2021

Glyn Wittwer  and
Kym Anderson Open the ORCID record for Kym Anderson [Opens in a new window]
Glyn Wittwer
Affiliation:
Centre of Policy Studies, Victoria University, 300 Flinders Street, Melbourne, Vic. 8001 Australia; e-mail: glyn.wittwer@vu.edu.au.
Kym Anderson*
Affiliation:
Wine Economics Research Centre, School of Economics, University of Adelaide, AdelaideSA5005, Australia and Arndt-Cordon Department of Economics, Australian National University, CanberraACT 2600
*
e-mail: kym.anderson@adelaide.edu.au (corresponding author).
Get access Rights & Permissions [Opens in a new window]

Abstract

This article provides an empirical case study of the impacts of the COVID-19 pandemic on global beverage markets, particularly the wine sector. Both international trade and domestic sales have been adversely affected by temporary shifts away from on-premise sales by social distancing measures and self-isolation that led to the closure of restaurants, bars, and clubs, plus declines in international travel and tourism. Partly offsetting this has been a boost to off-premise and direct e-commerce sales. We first estimate those impacts in 2020 and their expected partial recovery in 2021 using a new model of global beverage markets. Further recent disruption to the global wine trade has been the imposition by China in late 2020 of prohibitive tariffs on its imports of bottled wine from Australia. Its diversionary and trade-reducing effects are compared with those due to COVID-19. (JEL Classifications: C63, D12, F14, F17, Q17)

Keywords

beverage market modelingpandemic responses by consumersprohibitive tariffstrade diversion
Type
Articles
Information
Journal of Wine Economics , Volume 16 , Issue 2 , May 2021 , pp. 117 - 130
Copyright
Copyright © The Author(s), 2021. Published by Cambridge University Press on behalf of American Association of Wine Economists

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Footnotes

The authors are grateful for helpful referee comments and financial support from Wine Australia and the University of Adelaide's Faculty of the Professions and School of Agriculture, Food and Wine, under Research Project UA1803-3-1. This article replaces an early analysis reported in AAWE Working Paper No. 249, May 2020, at https://www.wine-economics.org/wp-content/uploads/2020/05/AAWE_WP249.pdf.

References

Anderson, K. (2020). Consumer taxes on alcohol: An international comparison over time. Journal of Wine Economics, 15(1), 42–70.CrossRefGoogle Scholar
Anderson, K., and Pinilla, V. (2020). Annual Database of Global Wine Markets, 1835 to 2018. Wine Economics Research Centre, University of Adelaide. Updated January 2021, at www.adelaide.edu.au/wine-econ/databases.Google Scholar
Anderson, K., and Wittwer, G. (2018). Cumulative effects of Brexit and other UK and EU27 bilateral FTAs on the world's wine markets. The World Economy, 41(11), 2883–2894.CrossRefGoogle Scholar
Bown, C. P., de Bolle, M., and Obstfeld, M. (2021). The pandemic is not under control anywhere unless it is controlled everywhere. PIIE blog, February 2. Available at Peterson Institute for International Economics, Washington DC, https://www.piie.com/blogs/realtime-economic-issues-watch/pandemic-not-under-control-anywhere-unless-it-controlled.Google Scholar
Cao, L., and Greenville, J. (2020). Understanding how China's tariff on Australian barley exports will affect the agricultural sector. ABARES Research Report 20.14, Australian Bureau of Agricultural and Resource Economics and Sciences. Available at https://www.agriculture.gov.au/abares/research-topics/trade/understanding-chinas-tariff-on-australian-barley.Google Scholar
European Commission (2020). Short-term Outlook for EU Agricultural Products in 2020. Brussels: European Commission, DG Agriculture and Rural Development. Available at https://ec.europa.eu/info/sites/info/files/food-farming-fisheries/farming/documents/short-term-outlook-spring-2020_en.pdf.Google Scholar
Giesecke, J. A., Tran, N. H., and Waschik, R. (2021). Should Australia be concerned by Beijing's trade threats: Modelling the economic costs of a restriction on imports of Australian coal. Australian Journal of Agricultural and Resource Economics, 65(1), 1–22.CrossRefGoogle Scholar
Holmes, A. J., and Anderson, K. (2017). Annual Database of National Beverage Consumption Volumes and Expenditures, 1950 to 2015. Wine Economics Research Centre, University of Adelaide, posted at www.adelaide.edu.au/wine-econ/databases/alcohol-consumption.Google Scholar
IMF (2020). World Economic Outlook. Washington, DC: International Monetary Fund, October. Available at https://www.imf.org/en/Publications/WEO.Google Scholar
Maloney, W., and Taskin, T. (2020). Determinants of social distancing and economic activity during COVID-19: A global view. COVID Economics, 13, 157–177.Google Scholar
McKibbin, W., and Fernando, R. (2020). Global macroeconomic scenarios of the COVID-19 pandemic. COVID Economics, 39, 1–58.Google Scholar
OIV (2020). State of the Vitiviniculture World. Paris: Organisation Internationale de la Vigne et du Vin (International Organization of Vine and Wine), April. Available at http://oiv.int/en/oiv-life/current-situation-of-the-vitivinicultural-sector-at-a-global-level.Google Scholar
United Nations (2019). COMTRADE Database. United Nations Commodity Trade Statistics Database, Statistics Division, New York, NY. Accessed August 15, 2019 at https://comtrade.un.org/db.Google Scholar
Wittwer, G., and Anderson, K. (2020a). A model of global beverage markets. Journal of Wine Economics, 15(3), 330–354.CrossRefGoogle Scholar
Wittwer, G., and Anderson, K. (2020b). COVID-19 and global beverage markets: Implications for wine. American Association of Wine Economists, Working Paper No. 249, May. Available from https://www.wine-economics.org/wp-content/uploads/2020/05/AAWE_WP249.pdf.Google Scholar
Wittwer, G., and Anderson, K. (2021). How will markets adjust to China's new tariff on imports of Australian wine? Wine and Viticulture Journal, 36(2), 66–70.Google Scholar