A Model of Global Beverage Markets

25 Pages Posted: 11 Feb 2020

See all articles by Kym Anderson

Kym Anderson

University of Adelaide - Centre for International Economic Studies (CIES); Centre for Economic Policy Research (CEPR); Australian National University

Glyn Wittwer

Monash University - Centre of Policy Studies

Date Written: February 2020

Abstract

This paper describes a new empirical model of the world's markets for alcoholic beverages and, to illustrate its usefulness, reports results from projections of those markets from 2016-18 to 2025 under various scenarios. It not only revises and updates a model of the world's wine markets (Wittwer, Berger and Anderson, 2003) but also adds beer and spirits so as to capture the substitutability of those beverages among consumers. The model has some of the features of an economywide computable general equilibrium model, with international trade linking the markets of its 44 countries and seven residual regions. It is used to simulate prospects for these markets by 2025 (business-as-usual), which points to Asia's rise. Then two alternative scenarios to 2025 are explored: one simulates the withdrawal of the United Kingdom from the European Union (EU); the other simulates the effects of the recent imposition of additional 25% tariffs on selected beverages imported by the United States from several EU member countries. Future applications of the model are discussed in the concluding section.

Keywords: beer, Cge modeling, changes in beverage preferences, international trade in beverages, spirits, Wine

JEL Classification: C53, F11, F17, Q13

Suggested Citation

Anderson, Kym and Wittwer, Glyn, A Model of Global Beverage Markets (February 2020). CEPR Discussion Paper No. DP14387, Available at SSRN: https://ssrn.com/abstract=3535473

Kym Anderson (Contact Author)

University of Adelaide - Centre for International Economic Studies (CIES) ( email )

School of Economics
Adelaide SA 5005
Australia
+61 8 8313 4712 (Phone)
+61 8 8223 1460 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Australian National University ( email )

Arndt-Corden Dept of Economics
Coombs Building
Canberra, AK ACT 2600
Australia
+61 8 8313 4712 (Phone)

HOME PAGE: http://publicpolicy.anu.edu.au/crawford_people/content/staff/acde/kanderson.php

Glyn Wittwer

Monash University - Centre of Policy Studies ( email )

Victoria 3145, Vic 3800
Australia
61 3 9905 5421 (Phone)
61 3 9905 2426 (Fax)

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