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What does California have in common with Finland, Norway and Sweden?

Author

Listed:
  • Bentzen, Jan

    (Department of Economics, Aarhus School of Business)

  • Smith, Valdemar

    (Department of Economics, Aarhus School of Business)

Abstract

The aim of this paper is to analyse the retail prices on wine in different countries. In general, country-specific price differences on identical wines are expected to reflect differences in taxes, import prices, transportation and other costs. Also the competitive conditions on the retail markets in the relevant countries are important. Accordingly, lack of competition at the retail level, high import prices and high duties on wine all contribute to increase wine prices. Next, consumer prices on wine are expected to be relatively lowest in the producer country and even lower on the local markets in the producing region. The Nordic countries are located far away from California and they all tax wine higher than the State of California. Some, e.g. Finland, Norway and Sweden, have state monopoly in the retail trade of wine and spirits whereas the sales system for wine in Denmark is more in line with the Californian system. Based on price information at the retail level, the paper analyses the logic of the relative prices on identical Californian wine bought in California compared to Denmark, Finland, Norway and Sweden.

Suggested Citation

  • Bentzen, Jan & Smith, Valdemar, 2002. "What does California have in common with Finland, Norway and Sweden?," Working Papers 02-6, University of Aarhus, Aarhus School of Business, Department of Economics.
    • Handle: RePEc:hhs:aareco:2002_006
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    File URL: http://www.hha.dk/nat/WPER/02-6_jbvs.pdf
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    Cited by:

    1. Jan Bentzen & Valdemar Smith, 2002. "Wine prices in the Nordic countries: Are they lower than in the region of origin?," Centre for International Economic Studies Working Papers 2002-23, University of Adelaide, Centre for International Economic Studies.

    More about this item

    Keywords

    Wine prices; Californian wines; wine taxes;
    All these keywords.

    JEL classification:

    • D40 - Microeconomics - - Market Structure, Pricing, and Design - - - General
    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

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