Stanford Study Finds French Wine Boycott Hurt Sales

BERKELEY, Calif. – The call to boycott French wine in retaliation for France's opposition to the war in Iraq put a cork in demand that may have cost millions in sales, researchers say.

Two Stanford University economists found that weekly sales of French wine dropped an estimated 26 percent at the peak of the boycott and resulted in a 13 percent slip for the six months or so that it lasted.

The findings contradict the perception that consumer boycotts don't have a measurable economic impact, said researcher Phillip Leslie, assistant professor of strategic management.

"We found there was a really big effect of consumers switching away from French wine," he said.

The boycott was an impromptu movement that flared up after France's leaders opposed the U.S. war policy. Consumers were urged to shun a number of French products and the House cafeteria on Capitol Hill renamed French fries "freedom fries."

To gauge the effect of the wine boycott, Leslie and doctoral candidate Larry Chavis looked at scanner data from supermarkets and large retailers and found French wine sales dropped during the six months after the war started in March 2003. Extrapolating the data, nationwide totals may have dropped as much as $112 million, they said, though cautioning that this is a rough calculation.

The researchers focused on four cities — Boston, Houston, Los Angeles and San Diego — choosing those places because they have relatively high rates of wine consumption and represent different aspects of the political spectrum. Ultimately, they decided to ignore the Boston data because of concerns about reliability.

Political preferences didn't seem to greatly affect participation, Leslie said.

The data indicate the boycott was most strongly supported in San Diego, a heavily Republican city with a strong military presence. But the second-highest participation came in the more-liberal Los Angeles. Houston, the most Republican in presidential voting, was third.

Cheap and expensive French wines were most affected; moderately priced wines the least. Researchers speculated that cheap wine fanciers weren't particularly wedded to their brands and didn't mind switching. They thought the expensive wine might be mainly intended as gifts, with other alternatives including premium California wines easily available.

On the other hand, moderately priced wine buyers probably were buying brands they like to drink at home and may have been more reluctant to make a change, the researchers said.

Hugues de Vernou, president of Village Imports, a San Francisco-based importer of French wines and specialty foods, said it's difficult to assess the precise impact of the boycott since two other things were going on at the time, the depreciation of the dollar against the euro and increasing competition worldwide.

Still, he agreed there was an effect. "We definitely felt that the sales were softer at the retail level."

The French wine industry has struggled with a number of problems, said de Vernou, including adapting to the new global wine market.

Still, he said, American consumers do have a taste for French wine. At in-store promotions, "you see 100 people, maybe one of them is going to say, 'I don't buy French wines,"' he said. "Most of them are curious. They ask what it is, what kind of varietal and they buy it."