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French Wine and the U.S. Boycott of 2003: Does Politics Really Affect Commerce?*

French Wine and the U.S. Boycott of 2003: Does Politics Really Affect Commerce?* AbstractIn early 2003, France actively tried to thwart the plans of the Bush administration to build international support for a war to depose Iraqi ruler Saddam Hussein. In response, calls in the United States for a boycott of French products, wine in particular, rebounded through all forms of media. In the spring of 2003, French business people even reported that the boycott calls were hurting their U.S. sales. Using a dataset of sales of nearly 4,700 individual wine brands, we show that there actually was no boycott effect. Rather, sales of French wine dipped for two reasons. First, they experience a cyclical peak at holiday time, from November through early January, and the boycott was called during the February to May period. Second, sales of French wine have been in a secular decline in the United States. Sales in February through May 2003 merely stayed on trend. We contrast our results with other recent work that has found evidence of a boycott effect but that omits the holiday effect from several specifications. French wine producers may be having economic problems, but it is not because of their government's foreign policy. (JEL classification: D12, F14, L66, Q17) http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Wine Economics Cambridge University Press

French Wine and the U.S. Boycott of 2003: Does Politics Really Affect Commerce?*

Journal of Wine Economics , Volume 2 (1): 20 – Jun 8, 2012

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Publisher
Cambridge University Press
Copyright
Copyright © American Association of Wine Economists 2007
ISSN
1931-437X
eISSN
1931-4361
DOI
10.1017/S1931436100000298
Publisher site
See Article on Publisher Site

Abstract

AbstractIn early 2003, France actively tried to thwart the plans of the Bush administration to build international support for a war to depose Iraqi ruler Saddam Hussein. In response, calls in the United States for a boycott of French products, wine in particular, rebounded through all forms of media. In the spring of 2003, French business people even reported that the boycott calls were hurting their U.S. sales. Using a dataset of sales of nearly 4,700 individual wine brands, we show that there actually was no boycott effect. Rather, sales of French wine dipped for two reasons. First, they experience a cyclical peak at holiday time, from November through early January, and the boycott was called during the February to May period. Second, sales of French wine have been in a secular decline in the United States. Sales in February through May 2003 merely stayed on trend. We contrast our results with other recent work that has found evidence of a boycott effect but that omits the holiday effect from several specifications. French wine producers may be having economic problems, but it is not because of their government's foreign policy. (JEL classification: D12, F14, L66, Q17)

Journal

Journal of Wine EconomicsCambridge University Press

Published: Jun 8, 2012

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