Wine and competition in New Zealand
Posted August 20, 2008on:
In the following story on Stuff, we are told that a New Zealand wine maker has sold a whole bunch of wine for $3.50 a litre – an incredibly low price for the premium brand.
The reason for these “firesales” of wine we are told is:
these big sales come on the back of a bumper harvest this season, resulting in surplus stock
So winemakers have had a bumper season – and as a result they are having to sell some of their wine excessively cheaply. Doesn’t this seem weird.
Well it makes complete sense when we think either:
- There is competition in the wine industry or,
- The wine company is able to price discriminate between markets