The Wine Market in Japan: Market competition among exporting countries and the strategy of US wine Katsumi Arahata Department of Agricultural Economics, Faculty of Agriculture, Gifu University, Japan 1-1, Yanagido, Gifu shi, Gifu pref. 501-1193, Japan E-mail:
[email protected] Phone: +81-(0)58-293-2904 Selected paper prepared for presentation at the American Agricultural Economics Association Annual Meeting, Denver, Colorado, August 1-4, 2004 Copyright 2004 by K. Arahata; All right reserved. Readers may make verbatim copies pf this document for non-commercial purpose by any means, provided that this copyright notice appears on all such copies. The Wine Market in Japan: Market competition among exporting countries and the strategy of US wine Katsumi Arahata Abstract The purpose of this paper is to examine the structure of wine consumption in the Japanese market, focusing on the consumption in households. Considering various tendencies of Japanese eating and drinking habits nowadays related to wine consumption, the model was built and empirically estimated. The data to be investigated was household’s data from the past twenty-seven years of official statistics. It was found that Japanese households show high income elasticity for wine demand. The strategy to prioritize department store distribution was demonstrated to be effective due to the fact that wine consumption in the high income class is steadily high, while the sensitivity to income and compatibility of foods is higher in middle income classes. However, the result that compatibility of foods with wine is influential suggests the necessity to revise the strategy. The facts that Japanese in general accept to taste wine although there are some cultural barriers such as incompatibility of foods with wine should be considered in the strategy.