Domaine Pas de Choix: government intervention in the Champagne market
| Published date | 12 March 2018 |
| Pages | 51-61 |
| Date | 12 March 2018 |
| DOI | https://doi.org/10.1108/JEPP-D-17-00019 |
| Author | Colleen E. Haight,Nikolai G. Wenzel |
| Subject Matter | Strategy,Entrepreneurship,Business climate/policy |
Domaine Pas de Choix :
government intervention in the
Champagne market
Colleen E. Haight
San Jose State University, San Jose, California, USA, and
Nikolai G. Wenzel
Fayetteville State University, Fayetteville, North Carolina, USA
Abstract
Purpose –Subsequent to the First World War, the French Government regulated the Champagne industry,
and locked the status of protected (and excluded) grapes into the new Appellation d’Origine Contrôlée system,
forever altering the incentives and output of wine producers. The paper aims to discuss these issues.
Design/methodology/approach –As a result, some indigenous varietals have disappeared entirely from
the region –and a handful remain only in the vineyards and bottles of a few bold entrepreneurs, constituting
less than 1 percent of Champagne production.
Findings –The authors assess several traditional explanations ( from taste and preferences to agricultural
resilience)- and dismiss them as unconvincing. Instead, the authors adopt a public choice framework of
regulatory capture to explain the puzzle of thwarted entrepreneurship and consumer choice.
Originality/value –This paper is original.
Keywords Champagne, Quality, Regulation, Consumer choice, Wine appellations
Paper type Research paper
1. Introduction
Champagne is just a wine, but it is also so much more; it is the stuff of ceremony and romance.
The monk Dom Pérignon famously exclaimed, upon tasting his first Champagne, “come quickly-
I have bottled the stars!”It has inspired leaders (Napoleon explained that “in victory one
deserves it, in defeat one needs it”and Winston Churchill reminded his generals, to “remember,
gentlemen, it’s not just France we are fighting for, it’s Champagne!). Champagne has inspired
more quips than we can fit here. We quote just two for flavor. Coco Chanel explained, simply and
elegantly, “I only drink Champagne on two occasions, when I am in love and when I am not”and
the famous bon vivant John Maynard Keynes is said to have shed this mortal coil with the
parting wisdom, “my only regret in life is that I didn’t drink enough Champagne”(if we take
issue with his economics (see Buchanan and Wagner, 1997/2000), we must applaud his taste).
But Champagne alsopresents an interesting question ofpolitical economy, with stories of
rent-seeking and thwarted entrepreneurship. Imagine, for a moment, the following scenario:
you are a wine connoisseur. You know your varietals and are careful to select your wines
based on a firmunderstanding of the regions,climate and annual growingconditions. How do
you feel about politicians selecting what varietals go into your Champagne?
Subsequent to the First World War, the French Government regulated the Champagne
industry and locked the status of protected (and excluded) grapes into the new Appellation
d’Origine Contrôlée (AOC) system, altering the incentives and output of wine producers
(on AOC generally, see Robinson, 2006, p. 26). As a result, some indigenous varietals have
disappeared entirely from the region –and a handful remain only in the vineyards and
bottles of a few bold entrepreneurs. These hold-outs are allowed to cultivate existing vines
of lost varietals, but forbidden from planting new rootstock of grapes other than the big
three (Chardonnay, Pinot Noir, and Pinot Meunier).
Journal of Entrepreneurship and
Public Policy
Vol. 7 No. 1, 2018
pp. 51-61
© Emerald PublishingLimited
2045-2101
DOI 10.1108/JEPP-D-17-00019
Received 30 August 2017
Revised 1 December 2017
Accepted 2 December 2017
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/2045-2101.htm
JEL Classification —B52, L51, N53, N54
51
Domaine
Pas de Choix
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