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A Model of Global Beverage Markets

Published online by Cambridge University Press:  01 September 2020

Glyn Wittwer  and
Kym Anderson Open the ORCID record for Kym Anderson [Opens in a new window]
Glyn Wittwer
Affiliation:
Centre of Policy Studies, Victoria University, 300 Flinders Street, MelbourneVIC8001, Australia; e-mail: Glyn.Wittwer@vu.edu.au.
Kym Anderson*
Affiliation:
Wine Economics Research Centre, School of Economics, University of Adelaide, AdelaideSA5005, Australia and Arndt-Corden Department of Economics, Australian National University, CanberraACT2600
*
e-mail: kym.anderson@adelaide.edu.au (corresponding author).
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Abstract

This article 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 2016–2018 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 economy-wide 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. (JEL Classifications: C53, F11, F17, Q13)

Keywords

CGE modelingchanges in beverage preferencesinternational trade in beveragespremiumization of alcohol markets
Type
Articles
Information
Journal of Wine Economics , Volume 15 , Issue 3 , August 2020 , pp. 330 - 354
Copyright
Copyright © American Association of Wine Economists, 2020

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Footnotes

The authors are grateful for helpful comments from journal referees and financial support from Wine Australia, under Research Project UA1803-3-1, and the University Adelaide's Faculty of the Professions and School of Agriculture, Food & Wine.

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