Have policy distortions spilled over across wine markets? Evidence from the French wine sector

Evens Salies (1) , Bodo Steiner (2)

1 OFCE - Observatoire français des conjonctures économiques (Sciences Po)
2 UCC - University College Cork

This paper investigates cross-market effects of policy instruments that were implemented in the table and quality wine market as one of the pillars of market intervention in Europe’s Common Market Organisation (CMO) for wine. We explore two hypotheses regarding the spill-over of distillation policy distortions and quality downgrading. Empirical evidence from France, the largest producer of quality wines in Europe, provides support for the hypothesis that distillation policy distortions in the quality wine market have spilledover to the table wine market. As predicted by our second hypothesis, we find evidence for quality downgrading, a phenomenon that has so far received little attention in the wine economics literature.

Mots clés: Common Market Organisation for wines; distillation; spill-over effects; quality downgrading; France; heterogeneous panel

Domaines: Economies et finances

Evens Salies, Bodo Steiner. Have policy distortions spilled over across wine markets? Evidence from the French wine sector. 2011. ⟨hal-03461418⟩