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The Impact of Exchange Rates on French Wine Exports

Published online by Cambridge University Press:  07 May 2019

Jean-Marie Cardebat  and
Jean-Marc Figuet
Jean-Marie Cardebat
Affiliation:
LAREFI, Université de Bordeaux, Avenue Léon Duguit, 33608 Pessac, France; e-mail: jean-marie.cardebat@u-bordeaux.fr.
Jean-Marc Figuet
Affiliation:
LAREFI, Université de Bordeaux, Avenue Léon Duguit, 33608 Pessac, France; e-mail: jean-marc.figuet@u-bordeaux.fr.
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Abstract

In this article, we analyze the impact of varying exchange rates on French wine exports using a dynamic Armington panel model for the time period from 2000 to 2011. Our results suggest that French wines have become less competitive during the 2000s. This is due to two factors: rising domestic wine prices relative to foreign competitors and the appreciation of the euro against the USD and the GBP. Chinese demand appears to be a key driver of French wine exports. In addition, we find some compositional effects in Bordeaux wine exports. In response to the appreciation of the euro, the share of high-priced wines has increased, suggesting some degree of quality sorting in response to exchange-rate changes. (JEL Classification: F14, F31, Q17)

Keywords

exchange ratesFrench wine exportswine quality
Type
Articles
Information
Journal of Wine Economics , Volume 14 , Issue 1 , February 2019 , pp. 71 - 89
Copyright
Copyright © American Association of Wine Economists 2019 

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Footnotes

We thank an anonymous referee and the editor for their useful comments that greatly improved the quality of this article. We also would like to thank Alan Sichel, the President of the Bordeaux union of négociants and CEO of Maison Sichel, and Mathieu Chadronnier, the CEO of CVBG, for providing further insights into the Bordeaux wine trade.

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