Wine demand in the United Kingdom and new world structural change: a source-disaggregated analysis

This study examines bottled wine demand in the United Kingdom (UK) by exporting country and assesses the structural adjustment in demand as indicated by the decline in imports since 2004. When comparing the two periods, 1995–2003 and 2005–2009, UK wine imports from Australia became more responsive to changes in aggregate wine expenditures (in real terms) in the latter period. The demand for French wines became more price inelastic in the latter period while the demand for other European wines became price elastic. If the UK government is concerned with decreasing alcohol consumption, an increase in the wine excise tax would lead to a relatively larger decrease in imports from Italy, Portugal, and Spain. The tax on French wines would lead to greater revenue, but a smaller decrease in French wine consumption. [EconLit citations: F14; Q11; Q17].