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In Vino ‘No’ Veritas: impacts of fraud on wine imports in China

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  • Andrew Muhammad
  • Amanda M. Countryman

Abstract

China is one of the largest wine importing countries in the world and is poised for continued import growth in the future. Increased wine purchases throughout China have given rise to persistent fraud where fake wines are packaged and sold with counterfeit contents and labels. For exporting countries like France, counterfeit wines displace market share, damage foreign brand reputation, and cause distrust in consumers who are aware of counterfeiting problems throughout the country. We examine the impact of fraudulent wine events (as measured by negative media reports) on Chinese wine demand differentiated by supplying country. We employ the Rotterdam demand system and a switching regression procedure to estimate import demand and compare results across different media variable specifications. Results consistently show that negative reports disproportionately affect French wine regardless of how the media variable is specified. This is not surprising because most fraudulent events involve French wine counterfeits.

Suggested Citation

  • Andrew Muhammad & Amanda M. Countryman, 2019. "In Vino ‘No’ Veritas: impacts of fraud on wine imports in China," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 63(4), pages 742-758, October.
    • Handle: RePEc:bla:ajarec:v:63:y:2019:i:4:p:742-758
    DOI: 10.1111/1467-8489.12333
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    Cited by:

    1. Luca Barbaglia & Christophe Croux & Ines Wilms, 2022. "Detecting Anti-dumping Circumvention: A Network Approach," Papers 2207.05394, arXiv.org.
    2. Ehmke, Mariah Dolsen & Bonanno, Alessandro & Boys, Kathryn & Smith, Trenton G., 2019. "Food fraud: economic insights into the dark side of incentives," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 63(4), October.

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