French Wine and the U.S. Boycott of 2003: Does Politics Really Affect Commerce?
In 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.
The authors thank the Public Policy Institute of California for partial funding of this research. The research for this article was conducted when Shatz was a research fellow at the Public Policy Institute of California. Any opinions expressed in this paper are those of the authors and do not necessarily represent the views of the RAND Corporation or its research clients or sponsors, the views of the staff, officers, or board of directors of the Public Policy Institute of California, or the views of the other institutions listed below. We are deeply indebted to Frank Vannerson of Mt. Lucas Management Corporation for data, and for many helpful discussions and useful comments. The views expressed herein are those of the author(s) and do not necessarily reflect the views of the National Bureau of Economic Research.
Journal of Wine Economics / Volume 2 / Issue 01 / Spring 2007 pp 55-74 Copyright © American Association of Wine Economists 2007 DOI: http://dx.doi.org/10.1017/S1931436100000298 (About DOI), Published online: 08 June 2012 citation courtesy of