A forecast of Cava wine sales applied to vine planting authorizations

Article  -  Thursday, 1 December 2022

Teruel, M., Soldevila, M.V. and Martin, M. (2022): "A forecast of Cava wine sales applied to vine planting authorizations", British Food Journal

The European Union's new vineyard planting authorization system came into force in 2016. This new system poses a challenge for EU ministries of agriculture, which must annually set the authorized areas for new plantings. In the case of Designations of Origin (DOs) and Protected Geographical Indications (PGIs), the challenge is, if anything, greater. On the one hand, variations in surface area must not restrict production in such a way as to generate price increases with negative repercussions on sales. On the other hand, increases in acreage can lead to overproduction and the consequent devaluation of the DO.

The paper presents a prediction model for the specific case of DO Cava. This DO is the second one in production in Spain and the first one in terms of exports. It is a territorially dispersed DO that shares its territory with other DOs, which adds further complexity to the analysis. The study carried out shows that cava sales determine the dynamics of the base wine market and, consequently, of the part of the harvest that will be used to make cava. The model presented is based on a VAR model with 3 lags to which a demand model has been added on the sales forecast. The results obtained present 3 scenarios and conclude that, at present, it is not advisable to increase the surface area of DO Cava due to the risk of generating problems of oversupply.

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