Factors that Affect the Price of a Bottle of Wine -- Supply and Demand

Question 1

What factors influence the demand for wine?

Answer 1

Social Factors
Economic Factors
Legislative and Political Factors

Question 2

What factors influence the supply of wine?

Answer 2

Production
Legislation

Question 3

What social factors influence the demand for wine?

Answer 3

Changes in consumption habits (e.g. younger people drinking less wine, health concerns, changes in lifestyle, reduced availability of cheap wine)
Changing consumer preferences
Changes in reputation
Changes in spending patterns

Question 4

What economic factors influence the demand for wine?

Answer 4

Strength of the economy
Fluctuations in currency exchange
Changes to the market

Question 5

What legislative and political factors influence the demand for wine?

Answer 5

Laws prohibiting or limiting the sale of alcohol
Government policies to reduce alcohol consumption
Taxation
International trade
Wine laws

Question 6

What production factors influence the supply of wine?

Answer 6

Area under vine
Vine pull schemes
EU restrictions on planting new vineyards
Conversion of vineyard land to other uses
Abandonment of rural areas
Human factors — more grapes, less area
Natural factors — weather, climate

Question 7

What is the main legislative influence on the supply of wine?

Answer 7

The increasing number of Geographical Indications (GIs) around the wine world. All of these define where grapes for wines with specific geographical names can be grown.

Question 8

What are the challenges of an over-supply of wine?

Answer 8

Downward pressure on prices
Consumers moving to cheaper alternatives
Moving into new markets
Creation of less expensive ‘alternate’ labels
Devaluation of the brand

Question 9

What are the challenges of an under-supply of wine?

Answer 9

Strained business relationships due to lack of product
Allocation of wines in most cases
Price increases possible
Alternate products might be found

Question 10

What are some human factors that influence the supply of wine?

Answer 10

Improved production techniques
Relaxation of laws that may limit supply (e.g. irrigation)

Question 11

What are some natural factors that influence the supply of wine?

Answer 11

Weather conditions
Climate conditions