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Geographical brand and country-of-origin effects in the Chinese wine import market

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Abstract

The effect of origin on consumer choice, which is a pivotal topic for wine and food products, has not been fully explored in relation to the strength of geographical brands. This research provides new insights into geographical brand and country-of-origin (COO) effects in China. It focuses on the power of geographical brands in catalysing consumer expenditure, and the effect of COO in competition with Protected Designations of Origin (PDOs) and Protected Geographical Indications (PGIs) as specific typologies of geographical brands in the EU wine industry. With the help of the Restricted Source Differentiated Almost Ideal Demand System model, the study analyses Chinese still bottled wine imports. The main findings highlight the dual effect of geographical indications as umbrella brands and quality cues, depending on the level of aggregation. PDOs, PGIs and COO are found to have the same expenditure elasticity, and the European PDO policy played an important role to support the competition with the geographical indications of New World countries. The study sheds light on the opportunities and constraints for existing businesses and new entrants operating in the emerging Chinese wine market. The findings may also interest other industries seeking to deepen their COO brand management in China.

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Notes

  1. According to this regulation, ‘PDO means the name of a region, a specific place or, in exceptional cases, a country used to describe a wine that complies with the following requirements: (i) its quality and characteristics are essentially or exclusively due to a particular geographical environment with its inherent natural and human factors; (ii) the grapes from which it is produced come exclusively from this geographical area; (iii) its production takes place in this geographical area; (iv) it is obtained from vine varieties belonging to Vitis vinifera’, and ‘PGI means an indication referring to a region, a specific place or, in exceptional cases, a country, used to describe a wine that complies with the following requirements: (i) it possesses a specific quality, reputation or other characteristics attributable to that geographical origin; (ii) at least 85 per cent of the grapes used for its production come exclusively from this geographical area; (iii) its production takes place in this geographical area; (iv) it is obtained from vine varieties belonging to Vitis vinifera or a cross between the Vitis vinifera species and other species of the genus Vitis’.

  2. Block separability: Hypothesis 0: Geographically branded wines are separable from all other wines, χ2=95.02 DF: 5; Hypothesis 0: Non-geographically branded wines are separable from all other wines, χ2=140.14 DF: 2; Hypothesis 0: All of the above, χ2=218.44 DF: 7. Product aggregation: Hypothesis 0: Geographically branded wines can be aggregated, χ2=547.42 DF: 15; Hypothesis 0: Non-geographically branded wines can be aggregated, χ2=339.43 DF: 6.

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Authors and Affiliations

  1. Department of Business Administration, University of Verona, Via della Pieve, 70, San Floriano, 37029, San Pietro in Cariano (VR), Italy

    Lara Agnoli, Roberta Capitello & Diego Begalli

Authors
  1. Lara Agnoli
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  2. Roberta Capitello
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  3. Diego Begalli
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Correspondence to Diego Begalli.

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2PhD, is an associate professor at the University of Verona (Italy), Department of Business Administration. Her research interests are in consumer behaviour, marketing and communication in the wine industry. Her recent publications include a book chapter on the management of food and wine events and scientific articles on the analysis of wine consumer decision-making process, with focus on emerging wine markets and wineries’ online communication.

3PhD, is a full professor at the University of Verona (Italy), Department of Business Administration. His research activity is focused on agro-food business management, consumer behaviour, and wine and food products branding. His recent publications include articles on collective brand strategies in food and wine territorial systems, wine consumers’ behaviour, and analysis of impacts of climate change on wine businesses performance.

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Agnoli, L., Capitello, R. & Begalli, D. Geographical brand and country-of-origin effects in the Chinese wine import market. J Brand Manag 21, 541–558 (2014). https://doi.org/10.1057/bm.2014.27

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