How Important is Reputation for New Zealand Wine Makers?

The wine industry in New Zealand has been maturing over the past few decades, with consumers becoming more sophisticated and wineries responding by increasing their production of premium varieties. In addition, there have been several legal changes and subsequent changes to the distribution and marketing of wine in New Zealand that have made wine more widely available. It is therefore an interesting and dynamic time to gain a more comprehensive understanding of the relative effects of regional reputation and producer-specific quality on the willingness to pay for domestically produced premium table wine in New Zealand. Previous empirical work suggests that New Zealand consumers rely on both expert opinion and regional reputation when determining their willingness to pay for wine produced domestically. The current paper extends this work by considering the development of a winery's reputation in more detail. Hedonic price analysis is used to determine the price premia associated with a range of indicators of both individual and collective reputation. Preliminary statistical results are presented and interpreted within the context of a growing body of international literature on wine economics.