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Spring 2012

ISSN 0890-913X

Volume 27, Number 2

Categories: Politics | Spring 2012

Rent-Seeking and Decline in the French Wine Industry

Nikolai G. Wenzel, Florida Gulf Coast University

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TheJournalofPrivateEnterprise27(2),2012,63–81Rent-SeekingandDeclineintheFrenchWineIndustryNikolaiG.Wenzel*FloridaGulfCoastUniversityAbstractThejudgmentofParis,inwhichCaliforniawinesfirstsurpassedtheFrenchinablindtasting,shooktheworldin1976.Butitwasnotuntil2003thatNewWorldwinesoutpacedFrenchexports.Demand-sidefactorsaffectFrenchwine;however,thesupplysideismoreintriguing.France'sregulatoryenvironmentcanbesustainedonlythroughmonopolisticrentseekingandtaxpayersubsidies.Inkeepingwiththetransitionalgainstrapliterature,rentsappeartohavebeenexhausted;whilesomesegmentsoftheFrenchwineindustrywouldbenefitfromtheabilitytoinnovate,muchoftheindustrywouldlikelycollapsewithoutthecurrentframework.JELCodes:B52,D72,L66Keywords:Innovation;Tradition;Appellationd'OrigineContrôlée;Frenchwine;Newworldwine;PublicchoiceI.IntroductionAlthoughFrancestillenjoysaworld-classreputationintheworldofwine,itsdominantpositionhasbeenerodedovertheyears.Firstcamethe1976"JudgmentofParis,"inwhichCaliforniawinesfirstsurpassedtheirFrenchcousinsinablindtasting.Then,in2003,Frenchexports(byvalue)wereoutpacedforthefirsttimebywinesfromtheNewWorld.Whathappened?Toanextent,France'sdeclinecanbeexplainedwithtraditionaltoolsofeconomics,especiallyduetofallingdemand.However,thesupplysideismuchmoreintriguing;*ManythankstoMichelleFisheringfordiscussionsaspartofherundergraduateresearchprojectontheseveryquestions.Forinsightsandfeedback,thankstoBetsyCarter,ananonymousreferee,participantsatthe2008,2009,and2010meetingsoftheAmericanAssociationofWineEconomists,mysummer2008interviewees,andtheproductivedrinkingoftheHenryC.SimonsCircle.ThankstotheMercatusCenteratGeorgeMasonUniversityforsettingmeontheinitialpathofanalyticnarratives.FinancialsupportfromHillsdaleCollege'ssummer2008facultyresearchgrantprogramismostgratefullyacknowledged;specialthankstoProvostDavidWhalenforguidingmetothisgrant.Theusualdisclaimerapplies.63

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Metadata [hide]

Title	Rent-Seeking and Decline in the French Wine Industry
Authors/Creators:	Nikolai G. Wenzel, Florida Gulf Coast University
Year:	2012
Volume:	27
Number:	2
Pages:	63 - 81
Publisher:	The Association of Private Enterprise Education
ISSN:	0890-913X
Document Type:	Articles
Keywords:	Innovation, Tradition, Appellation d'Origine Contrôlée, French wine, New world wine, Public choice

Citation:
Wenzel, Nikolai G. / 2012. "Rent-Seeking and Decline in the French Wine Industry." The Journal of Private Enterprise, 27(2): 63-81.