PULLMAN, Wash. - What effect do state regulations on the sale and consumption of liquor have on per capita wine sales? Recent attempts in Washington state to privatize liquor distribution and sales inspired a research paper by Dennis Reynolds and Caryle Rice titled, “Do U.S. State Laws Affect Per Capita Wine Purchases?"
Reynolds, the Ivar B. Haglund Endowed Chair in the School of Hospitality Business Management, is director of the school's Wine Business Management Program. Rice graduated in May in the first cohort of wine business management majors and is brand manager for Figgins Family Wine Estates.
Reynolds and Rice hypothesized that per capita wine purchases would be greater in states where there was less state control over wine sales and distribution, where wine tasting was allowed and where there were discounts and rebates on wine purchases. They studied nationwide per capita wine sales for 2007-08.
They discovered that the only factor that had a measurable effect on per capita wine sales was wine tasting. When consumers could test the product, the element of risk was diminished and they were more likely to purchase brands they had sampled.
The researchers concluded that wineries would do well to focus their energies on changing state laws on wine tasting rather than pursuing legislation controlling how wine is distributed.
Reynolds and Rice presented their research at WSU’s spring Academic Showcase and at the American Association of Wine Economists conference. Rice earned a first place for her oral presentation at WSU’s undergraduate research symposium and a third place at the Washington Association of Wine Grape Growers poster session.
Shipping, tourism among future study topics
Now that the first step of the research is complete, Reynolds is looking ahead to future studies. There are many variables to consider, he said, such as specific state laws and their effects on wine sales, the limitations on shipping wine among states, and the effect of the wine tourism industry on the economy.
Reynolds said he believes in the land-grant mission of WSU and is striving to help the state wine industry understand more about retailing, the supply chain and the complex laws governing wine sales.
Toward that goal, he envisioned the wine business management major to “meet the needs of the Washington wine industry” and be cost neutral in doing so. Optimistically thinking it would take a year to put the program together, he managed to do it in three years - “light speed by academic standards,” he said.