WSET LEVEL 4 D2 QUESTIONS
AND ANSWERS
DesCribe what happens when relative supply and demand Change - CorreCt
Answer ✔✔ - - When supply exCeeds demand: priCe falls, Consumer have
greater ChoiCe of Cheaper alternatives. ProduCers lower priCe to remain
Competitive. Fall in priCes lead to inCreased demand in the long run
- When demand exCeeds supply: priCe inCrease, Consumers willing to pay
higher for some wines; others simply switCh to another wine or a different
alCoholiC drink
The general faCtors affeCting demand for wine - CorreCt Answer ✔✔ - -
SoCial
- EConomiC
- Legislative
- PolitiCal
List major soCial faCtors affeCting demand for wine - CorreCt Answer ✔✔ - -
Change in Consumption habits
- Change in Consumer preferenCes
- Change in reputation
- Change in spending patterns
DesCribe how global wine Consumption habits have Changed sinCe 2001 -
CorreCt Answer ✔✔ - - Rapid growth in the first part of 2000
- Fall after 2008 finanCial Crisis as many Consumers reduCe spending on
non-essential produCts
- Slight deCline in reCent years and due to remain stable to 2021
- Strong growth in sparkling wine sales
,Top five Countries for total wine Consumption in 2017 - CorreCt Answer ✔✔ -
- USA
- FranCe
- Italy
- Germany
- China
Explain the inCreasing wine Consumption in USA in the last 20-30 yr -
CorreCt Answer ✔✔ - - InCreasing globalization of the food and drinks
industry
- Consumers more able and willing to embraCe new tastes
- InCreases and improvement in wine produCtion in the domestiC market
Explain the inCreasing wine Consumption in China - CorreCt Answer ✔✔ - -
Growing middle Class showing wealth and status - move away from loCal
drinks
- Aspire to drink imported wine
- Bilateral trade agreement with Australia, Chile etC
Give possible reasons for falling wine Consumption in traditional wine-
drinking Countries - CorreCt Answer ✔✔ - - Younger people drinking less
wine: old fashioned; less time in bars, more on soCial media
- Health ConCerns: mostly due to government Campaigns, e.g., Loi Evin in
FranCe
- Changes in lifestyle: less time for longer meals, less lunChtime drinking
- ReduCed availability of Cheap wine: reduCe over-produCtion, some
Consumers switCh to Cheaper alCoholiC drinks
List a few major Changes in Consumer preferenCes in reCent years - CorreCt
Answer ✔✔ - - Rose and ProseCCo beCome popular
- InCreased demand for lower-alCohol wines
- Medium-sweet German wines and fortified wines going out of fashion
,What faCtors Could influenCe a wine's reputation? - CorreCt Answer ✔✔ - -
Good reviews from leading publiCations and CritiCs
- Online influenCers and KOLs
- PresenCe in popular Culture, e.g., films television series, musiC lyriCs or
Celebrity lifestyle news
- Peer opinions
What are priCe-sensitive markets? Give examples - CorreCt Answer ✔✔ -
Markets where Consumers are unwilling to pay more than the lowest priCe
possible for the style of wine they want to buy. E.g., Germany, UK
What Can produCers do to retain Customers in priCe-sensitive markets? -
CorreCt Answer ✔✔ - - Competition is fierCe - reduCe priCe or simply Choose
not to sell
- ReluCtant to pass on inCreases in produCtion Costs to Consumers
- Try to build up 'brand loyalty'
Explain 'premiumization' - CorreCt Answer ✔✔ - - Consumers are
inCreasingly willing to pay more for individual bottles of wine, often beCause
they are buying less wine by volume
- Happens in USA even in UK
List major eConomiC faCtors that influenCe demand for wine - CorreCt
Answer ✔✔ - - Strength of eConomy
- FluCtuations in CurrenCy exChange
- Changes to the market
Give examples in whiCh the strength of eConomy affeCt wine demand -
CorreCt Answer ✔✔ - - 2008 finanCial Crisis: Champagne demand falls,
ProseCCo grew; trade wine for beer, Cider etC
- Chinese eConomy growing: emerging middle Class Chasing aspirational
wines
In what kind of market does CurrenCy fluCtuation have the most signifiCant
impaCt on the demand for wine? - CorreCt Answer ✔✔ - PriCe-sensitive
market
, When a wine-exporting Country's CurrenCy gains value Compared to that of
the importing Country, what Can a produCer do? - CorreCt Answer ✔✔ - -
InCrease wine priCe and losing sales
- Keep the priCe and lose profit
When a wine-exporting Country's CurrenCy loses value Compared to that of
the importing Country, what Can a produCer do? - CorreCt Answer ✔✔ - -
Lower priCe and boost sales
- Keep priCe stable and improve profits for future investment
What is one downside of weak CurrenCy on the part of the produCer? -
CorreCt Answer ✔✔ - Costs more to import equipment and supplies suCh as
barrels, Corks and yeast, whiCh may offset additional profits
How does Changes to the market affeCt demand for wine? - CorreCt Answer
✔✔ - - New Companies/produCts enter, others disappear
- Opportunities for Competition
- However, if supply is limited, priCe inCrease is possible
List major legislative and politiCal faCtors that affeCt demand for wine -
CorreCt Answer ✔✔ - - Laws prohibiting or limiting alCohol sale
- Government poliCies to reduCe alCohol Consumption
- Taxation
- International trade
- Wine laws
Give examples of laws that limit alCohol sale - CorreCt Answer ✔✔ - -
Monopoly
- USA three-tier system
- Min drinking age
- Limit hours in the day for alCohol sale
Give examples of government poliCies to reduCe alCohol Consumption -
CorreCt Answer ✔✔ - - FranCe: Loi Evin in 1991, restriCt alCohol advertising
AND ANSWERS
DesCribe what happens when relative supply and demand Change - CorreCt
Answer ✔✔ - - When supply exCeeds demand: priCe falls, Consumer have
greater ChoiCe of Cheaper alternatives. ProduCers lower priCe to remain
Competitive. Fall in priCes lead to inCreased demand in the long run
- When demand exCeeds supply: priCe inCrease, Consumers willing to pay
higher for some wines; others simply switCh to another wine or a different
alCoholiC drink
The general faCtors affeCting demand for wine - CorreCt Answer ✔✔ - -
SoCial
- EConomiC
- Legislative
- PolitiCal
List major soCial faCtors affeCting demand for wine - CorreCt Answer ✔✔ - -
Change in Consumption habits
- Change in Consumer preferenCes
- Change in reputation
- Change in spending patterns
DesCribe how global wine Consumption habits have Changed sinCe 2001 -
CorreCt Answer ✔✔ - - Rapid growth in the first part of 2000
- Fall after 2008 finanCial Crisis as many Consumers reduCe spending on
non-essential produCts
- Slight deCline in reCent years and due to remain stable to 2021
- Strong growth in sparkling wine sales
,Top five Countries for total wine Consumption in 2017 - CorreCt Answer ✔✔ -
- USA
- FranCe
- Italy
- Germany
- China
Explain the inCreasing wine Consumption in USA in the last 20-30 yr -
CorreCt Answer ✔✔ - - InCreasing globalization of the food and drinks
industry
- Consumers more able and willing to embraCe new tastes
- InCreases and improvement in wine produCtion in the domestiC market
Explain the inCreasing wine Consumption in China - CorreCt Answer ✔✔ - -
Growing middle Class showing wealth and status - move away from loCal
drinks
- Aspire to drink imported wine
- Bilateral trade agreement with Australia, Chile etC
Give possible reasons for falling wine Consumption in traditional wine-
drinking Countries - CorreCt Answer ✔✔ - - Younger people drinking less
wine: old fashioned; less time in bars, more on soCial media
- Health ConCerns: mostly due to government Campaigns, e.g., Loi Evin in
FranCe
- Changes in lifestyle: less time for longer meals, less lunChtime drinking
- ReduCed availability of Cheap wine: reduCe over-produCtion, some
Consumers switCh to Cheaper alCoholiC drinks
List a few major Changes in Consumer preferenCes in reCent years - CorreCt
Answer ✔✔ - - Rose and ProseCCo beCome popular
- InCreased demand for lower-alCohol wines
- Medium-sweet German wines and fortified wines going out of fashion
,What faCtors Could influenCe a wine's reputation? - CorreCt Answer ✔✔ - -
Good reviews from leading publiCations and CritiCs
- Online influenCers and KOLs
- PresenCe in popular Culture, e.g., films television series, musiC lyriCs or
Celebrity lifestyle news
- Peer opinions
What are priCe-sensitive markets? Give examples - CorreCt Answer ✔✔ -
Markets where Consumers are unwilling to pay more than the lowest priCe
possible for the style of wine they want to buy. E.g., Germany, UK
What Can produCers do to retain Customers in priCe-sensitive markets? -
CorreCt Answer ✔✔ - - Competition is fierCe - reduCe priCe or simply Choose
not to sell
- ReluCtant to pass on inCreases in produCtion Costs to Consumers
- Try to build up 'brand loyalty'
Explain 'premiumization' - CorreCt Answer ✔✔ - - Consumers are
inCreasingly willing to pay more for individual bottles of wine, often beCause
they are buying less wine by volume
- Happens in USA even in UK
List major eConomiC faCtors that influenCe demand for wine - CorreCt
Answer ✔✔ - - Strength of eConomy
- FluCtuations in CurrenCy exChange
- Changes to the market
Give examples in whiCh the strength of eConomy affeCt wine demand -
CorreCt Answer ✔✔ - - 2008 finanCial Crisis: Champagne demand falls,
ProseCCo grew; trade wine for beer, Cider etC
- Chinese eConomy growing: emerging middle Class Chasing aspirational
wines
In what kind of market does CurrenCy fluCtuation have the most signifiCant
impaCt on the demand for wine? - CorreCt Answer ✔✔ - PriCe-sensitive
market
, When a wine-exporting Country's CurrenCy gains value Compared to that of
the importing Country, what Can a produCer do? - CorreCt Answer ✔✔ - -
InCrease wine priCe and losing sales
- Keep the priCe and lose profit
When a wine-exporting Country's CurrenCy loses value Compared to that of
the importing Country, what Can a produCer do? - CorreCt Answer ✔✔ - -
Lower priCe and boost sales
- Keep priCe stable and improve profits for future investment
What is one downside of weak CurrenCy on the part of the produCer? -
CorreCt Answer ✔✔ - Costs more to import equipment and supplies suCh as
barrels, Corks and yeast, whiCh may offset additional profits
How does Changes to the market affeCt demand for wine? - CorreCt Answer
✔✔ - - New Companies/produCts enter, others disappear
- Opportunities for Competition
- However, if supply is limited, priCe inCrease is possible
List major legislative and politiCal faCtors that affeCt demand for wine -
CorreCt Answer ✔✔ - - Laws prohibiting or limiting alCohol sale
- Government poliCies to reduCe alCohol Consumption
- Taxation
- International trade
- Wine laws
Give examples of laws that limit alCohol sale - CorreCt Answer ✔✔ - -
Monopoly
- USA three-tier system
- Min drinking age
- Limit hours in the day for alCohol sale
Give examples of government poliCies to reduCe alCohol Consumption -
CorreCt Answer ✔✔ - - FranCe: Loi Evin in 1991, restriCt alCohol advertising
