Fine wine pricing in a small and highly competitive market

Masset, P., Mondoux, A. and Weisskopf, J.-P. (2022), "Fine wine pricing in a small and highly competitive market", International Journal of Wine Business Research. https://doi.org/10.1108/IJWBR-10-2021-0054

34 Pages Posted: 11 Mar 2021 Last revised: 15 Aug 2022

See all articles by Philippe Masset

Philippe Masset

Ecole hôtelière de Lausanne; University of Fribourg - Faculty of Economics and Social Science

Alexandre Mondoux

Changins haute école de viticulture et œnologie

Jean-Philippe Weisskopf

EHL Hospitality Business School

Date Written: August 1, 2022

Abstract

This study aims to identify the price determinants of fine wines in a small and competitive market. These characteristics are found in many lesser-known wine-producing countries and are often difficult to analyse due to a lack of data. We hand-collect data for 149 Swiss wineries and 2,454 individual wines over the period 2014-2018 provided by wineries. Prices mainly depend on collective reputation, production techniques, and product positioning. Surprisingly, following a sharp appreciation of the Swiss franc, producers did not reduce prices. The arrival of a highly influential wine expert on the market also had a positive price effect on rated wines and producers. Both hint at wineries attempting to position themselves relative to competitors. Few studies examine the price drivers in lesser-known wine markets, where competition is fierce. Our results show that wine pricing differs from other more famous and larger wine regions. In addition, we are also the first to analyse the impact of a currency shock and a reduction in information asymmetries on wine prices.

Keywords: experience good; wine; reputation; currency appreciation; information asymmetry

JEL Classification: D22; L11; L66; Q11

Suggested Citation

Masset, Philippe and Mondoux, Alexandre and Weisskopf, Jean-Philippe, Fine wine pricing in a small and highly competitive market (August 1, 2022). Masset, P., Mondoux, A. and Weisskopf, J.-P. (2022), "Fine wine pricing in a small and highly competitive market", International Journal of Wine Business Research. https://doi.org/10.1108/IJWBR-10-2021-0054 , Available at SSRN: https://ssrn.com/abstract=3769015 or http://dx.doi.org/10.2139/ssrn.3769015

Philippe Masset

Ecole hôtelière de Lausanne ( email )

Route de Cojonnex 18
Lausanne, 1000
Switzerland

University of Fribourg - Faculty of Economics and Social Science ( email )

Fribourg, CH 1700
Switzerland

Alexandre Mondoux

Changins haute école de viticulture et œnologie ( email )

Route de Duillier 50
Nyon, 1260
Switzerland

Jean-Philippe Weisskopf (Contact Author)

EHL Hospitality Business School ( email )

Route de Cojonnex 18
Lausanne, 1000
Switzerland

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