Free-riding on reputation for Prosecco PGI wines in Germany: Who

Free-riding on reputation for Prosecco PGI wines in Germany:
Who buys in?
Vasco Boatto
Andrea Dal Bianco
Bodo Steiner
Samuele Trestini
Dipartimento Territorio e
Sistemi Agroforestali
(TeSAF), Università di
Padova, Italy
Centro
Interdipartimentale di
Ricerca Viticoltura ed
Enologia (CIRVE),
Università di Padova, Italy
University of Southern
Denmark
Dipartimento Territorio e
Sistemi Agroforestali
(TeSAF), Università di
Padova, Italy
([email protected])
The level of protection for geographical indications (GI’s) for wines is a contentious legal and political
issue under the TRIPS agreement. This paper aims to shed light on the debate, by distinguishing wine
demand of consumers who purchase sparkling wines labeled in accordance with TRIPS (“Prosecco PGI”),
from demand for wines labeled with a proxy for GI’s (“Secco”). Our analysis employs ACNielsen
Homescan data from Germany, to estimate the probability of households consuming sparkling wines
differentiated by GI labeling, as a function of socio-demographics of the households. Since our analysis
relates to consumers’ valuation of labels that allude to protected GI’s for wine, which mislead
consumers into buying products that are unlikely to meet their quality expectations, our paper
contributes to the debate on market failure associated with wine labeling.
Keywords: multinomial logit; Prosecco PGI; Italy; wine labeling; household demand; market failure