Working Papers, Department of Economics, Aarhus School of Business, University of Aarhus
What does California have in common with Finland, Norway and Sweden?
() and Valdemar Smith
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.
Keywords: Wine prices; Californian wines; wine taxes; (follow links to similar papers)
JEL-Codes: D40; L81; O57; (follow links to similar papers)
17 pages, May 1, 2002
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