Wine economics

Sunday, April 23, 2006

Use of oak chips in wine to become legal in France

The debate over the use of oak chips in wine lingers on in Germany. Today the Süddeutsche Zeitung carries an article by Michael Klaesgen under the titel "Oak chips instead of barrique barrels". (; 24/04/06)

Klaesgen talks about the troubles of the French wine industry and the intention of Dominique Bussereau, the French Minister of Agriculture, to legalise the use of oak chips in winemaking.

At the end of the article Klaesgen mentions sympathecially the complaint by consumer protection people that the EU-US wine agreement, which had been signed at the end of last year, does not require winemakers to indicate on the wine label the use of oak chips and he quotes the French sommelier Phillipe Faure-Brac as saying that he - Faure-Brac - is unable to taste the difference between a wine from a barrique and an oaked wine; nevertheless he would like to be informed about it.

Apparently, labeling wine is less about providing wine drinkers with information about what taste to expect from a wine than it is how to feel about the wine. Why should the EU or some other government regulate the provision of information that some people need for no practical or tangible purpose?

Opening remarks

This blog is concerned with the economics of wine. Wine is an interesting product. It is highly heterogenous, traded over long distances, embedded in local culture in some regions and dispised by other cultures, its production methods range from traditional to high-tech, governments regulate, subsidize and tax its production and consumption, and, most importanly, many people enjoy it but have difficulty to describe meaningfully what it is they enjoy with a glass of wine.

Wine is at the same time a fairly simple product - fermented juice of vine grapes. and a highly complex product - an intoxicating drink produced by a process that is difficult to control and that yields a product which is in demand for its observable chemical and physical characteristics as well as for some unobservable, metaphysical characteristics. From an economics perspective, wine can sometimes be approached like any other commodity, e.g. wheat, corn, or pork bellies, and sometimes it is better approached like a rare piece of art. The complexities of wine make it, im my mind, a perfect product to apply and test economic ideas.