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Abstract
The aim of this paper is to analyse the retail prices of premium
German white wines sold in the Scandinavian countries. German
white wines account for approximately 5-6 per cent of the total sale
of wines – both red and white wines - in Denmark, Norway and
Sweden. However, the market shares of German wines in Scandinavia
have been declining for a number of years. Diminishing market
shares may reflect changes in consumer taste or simply ‘wrong’
prices, the latter related to both the level of wine prices (German
wines being relatively expensive) and the structure of wine prices. In
general, country-specific price differences for identical wines may
be caused by differences in taxes, different import prices, transportation
costs as well as other costs - and also different competitive
conditions at the retail level in the respective countries. Still, differences
in wine prices across countries do not always reflect the above
mentioned factors. The aim of this paper is to analyse further the
relationship between the prices of German white wines in the Scandinavian
countries and the prices in the country of production
(Germany) by direct comparison (price level) and by using a hedonic
price function approach (price structure). Using a sample of 150
German white wines being supplied on at least one of the national
markets in Scandinavia the analyses suggest that the prices on
German premium white wines on the Scandinavian markets are fair –
both in terms of absolute average prices and in terms of relative prices.