The oddities of the wine market

Jens Beckert, Jorg Rossel and Patrick Schenk at Cologne's Max Planck Institute have been looking at variations in the price of wine. Or more specifically, as the title of their paper states 'Wine as a Cultural Product: Symbolic Capital and Price Formation in the Wine Field'. For their study they analysed data from 110 wineries and 1,071 wines (it's not clear if they sampled any of them) as well as data on wine consumers in four German cities.

There are some real oddities in the wine market. Even expensive wines don't cost more than €10 a bottle to produce but, although chemically the same, a bottle of wine can cost 1.99 euros or 300 euros. 'These price differentials are justified by alleged quality differences between the wines. However ... it turns out that the price differences are largely unrelated to different production costs and to the sensual experience wine connoisseurs report when tasting the wine in a bland tasting ... even experts are not able to differentiate between wines based on objective characteristics and cannot rank wines according to their price'. Moreover, each time a new vintage comes along, the taste changes.

There are some generalisations one can make about price. Wines made of high status grape varieties (Riesling, Pinot) are usually more expensive. Dry wine is more expensive than sweet and semi-dry wine. Red wine is more expensive than white and rosé. Older wine is usually more expensive than that of a younger age.

Wine producers can develop symbolic capital that can be turned into profit. Wine producers that produce wines that are 'difficult' to drink because the consumer must first learn to appreciate them and 'work' on developing taste can accumulate such capital. This sounds like a formula for the consumer to be conned and a passport for pretentiousness - which does bring to mind an advert currently shown on British television in which a wine buff is mocked for such pretension.

It's an interesting paper, but there is relatively little about supply and demand which is always a key factor in any market, even one as unusual as that for wine.

Cows to get climate change fix

If it was April Fools Day one would think this was a joke, but a White House climate change initiative is searching for a 'cow of the future' whose greenhouse gas emissions would be cut by anti-methane pills, burp scanners and gas backpacks.

Methane is a particularly potent greenhouse gas with a global warming effect that is twenty times greater than carbon dioxide and cows emit a lot of it. A typical cow emits 250-300 litres of methane a day. The 88 million cattle in the US produce more of it than landfill sites, natural gas leaks or fracking. However, contrary to a common misconception, 97 per cent of the methane gas is released by the front end through burps, not through emissions from the back end.

Supplements such as basil can cut methane production in cows. In Argentina, scientists have created backpacks that collect gas via tubes plugged into cows' stomachs. That sounds as if it would raise animal welfare issues to me.

Climate change report emphasises food supply effects

The latest UN report on climate change emphasises food supply effects: Climate change.

The report argues that climate change has negatively affected wheat and maize yields both regionally and on a global basis. The effects of climate change on two other important food crops, rice and soya beans, have been smaller in the most important producing countries. There may be some positive effects on crops in cooler climates in future. However, the overall outlook for wheat, rice and maize production in tropical and temperate regions is expected to be more negative than positive.

The last assessment by the UN's Intergovernmental Panel on Climate Change in 2007 was more sanguine about how climate change was impacting on food production. Unfortunately, the suggestion that the CAP might incorporate a climate change pillar was rapidly dropped in the last set of reform negotiations.