Even the New York Times Laughs at France...
I quote, from the venerable bastion of France-loving latte-sipping Blue-state liberalism that is the New York Times:
Dear lord, economics has never been funnier!
(the link)
While winemakers are pulling up vineyards, both to reduce production and to concentrate on better-quality wines, the Bordeaux Wine Council, which includes both the world-famous chateaus and the independent producers, said in June that its members would voluntarily hold wine off the market in an effort to push up prices for less expensive wines. The volume of the 2004 vintage sold would be cut by up to 35 percent, compared with 2003.
The unsold wine would be stored until conditions improve, Jean-Louis Trocard, a former president of the wine council, said.
Why higher prices would help when demand is already low is not clear.
Dear lord, economics has never been funnier!
(the link)
3 Comments:
Now wait, isn't the point that if demand is low you cut supply? That seems reasonable. Though I am amused by the French framing the issue as one of price: suggests, instead of vineyards, "whineries"...
Well, the implication is that, right now, thereis already low demand. Raising prices (by constricting supply) could reduce demand even further. While this may in turn be profitable, it's not exactly a "sound" strategy.
Basically, right now the French can set the price as they choose, and they have an excess of inventory. Raising prices is exactly the opposite what they should (in theory) be doing.
Shep: "Whineries"?
To quote West Wing Season 1, Episode 1:
"Is this supposed to be funny or the truth?"
"Apparently it's neither."
Tom, I'm liking the (the link) aesthetic. When I steal your idea, remember that immitation is the sincerest form of flattery.
Post a Comment
<< Home