prices in the various regions. Note, however, the
weaker regional and varietal differentiation and the
absence of any obvious price premia trend in New
Zealand. The weaker varietal differentiation may
reflect the relatively few varieties grown in New
Zealand and (a point emphasised by Roberts and
Reagans, 2001) the newness of many of its premium
wine-producing regions. The lower price premia
New Zealanders seem willing to pay for higher-rated
wines and wineries compared with Australians may
simply reflect the lower per capita incomes in New
Zealand and their weaker preference for wine (their
per capita consumption being only 80 per cent that
of Australians, and being more heavily focused on
non-premium wines).
The difference between the two markets in the
degree of regional differentiation also may reflect
the fact that Australia has more major premium
regions that have been producing continuously for
a long time than does New Zealand. The greater
extent to which regional differentiation is increasing
in Australia is partly a consequence of the rapid growth
in the 1990s of new ultra-premium cool-climate
regions, which are challenging the supremacy of the
long-established regions. But another contributing
factor is that, unlike New Zealand, Australia has
introduced legislation (in 1993) to allow legal registration
of regional names (technically, ‘geographical
indications’).8 That legislation is providing
stronger rights over the intellectual property value
of regional names, thereby raising the rates of return
on investments in regional promotion. Even though
they cannot say anything about the profitability of
such investments, the above results are not inconsistent
with the view that price premia can be generated
through such promotion. The European tradition of
emphasising region in addition to nation of origin
would appear to be gradually taking hold in Australia.
It remains to be seen whether regional reputation
indicators become more or less important over
time. On the one hand, regions are investing more
in generic promotion of their regions; but on the
other, globalisation is causing individual wineries
to agglomerate and put more emphasis on building
their corporate brand reputation.
As for the signs and sizes of the premia/discounts
attached to variety, they are consistent with