Trade Exposure and Consumer Behavior During Recessions: The Case of the European Union Wine Industry

This paper examines how the financial crisis and the COVID-19 pandemic affected wine consumption across European Union (EU) member states, focusing on countries’ trade positions. Using a balanced panel of 28 EU countries from 2000 to 2022, we apply a panel difference-in-differences framework and a complementary event-study analysis to estimate the effects of these shocks. Because year fixed effects absorb shocks common to all countries, the design identifies differences between export-oriented and other countries, not EU-wide effects of the crises. Export-oriented EU countries show a larger, significant decline in measured wine consumption after the financial crisis, at the end of the post-crisis period. The comparison of the impact of COVID-19 is inconclusive because parallel trends are not supported. The estimates are conditional associations and may reflect how consumption is measured and characteristics shared by wine exporting countries. Findings highlight the importance of structural market characteristics for consumer behavior and suggest that global integration may condition the resilience of EU wine markets.