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WSET Level 4 D2 Exam Questions and Answers $13.49   Add to cart

Exam (elaborations)

WSET Level 4 D2 Exam Questions and Answers

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  • Course
  • WSET L4
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  • WSET L4

WSET Level 4 D2 Exam Questions and Answers

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  • August 20, 2024
  • 37
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers
  • WSET L4
  • WSET L4
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mereka
WSET Level 4 D2 Exam Questions and
Answers
Describe what happens when relative supply and demand change - Answer -- When
supply exceeds demand: price falls, consumer have greater choice of cheaper
alternatives. Producers lower price to remain competitive. Fall in prices lead to
increased demand in the long run

- When demand exceeds supply: price increase, consumers willing to pay higher for
some wines; others simply switch to another wine or a different alcoholic drink

The general factors affecting demand for wine - Answer -- Social
- Economic
- Legislative
- Political

List major social factors affecting demand for wine - Answer -- Change in consumption
habits
- Change in consumer preferences
- Change in reputation
- Change in spending patterns

Describe how global wine consumption habits have changed since 2001 - Answer --
Rapid growth in the first part of 2000
- Fall after 2008 financial crisis as many consumers reduce spending on non-essential
products
- Slight decline in recent years and due to remain stable to 2021
- Strong growth in sparkling wine sales

Top five countries for total wine consumption in 2017 - Answer -- USA
- France
- Italy
- Germany
- China

Explain the increasing wine consumption in USA in the last 20-30 yr - Answer --
Increasing globalization of the food and drinks industry
- Consumers more able and willing to embrace new tastes
- Increases and improvement in wine production in the domestic market

,Explain the increasing wine consumption in China - Answer -- Growing middle class
showing wealth and status - move away from local drinks
- Aspire to drink imported wine
- Bilateral trade agreement with Australia, Chile etc

Give possible reasons for falling wine consumption in traditional wine-drinking countries
- Answer -- Younger people drinking less wine: old fashioned; less time in bars, more on
social media
- Health concerns: mostly due to government campaigns, e.g., Loi Evin in France
- Changes in lifestyle: less time for longer meals, less lunchtime drinking
- Reduced availability of cheap wine: reduce over-production, some consumers switch
to cheaper alcoholic drinks

List a few major changes in consumer preferences in recent years - Answer -- Rose and
Prosecco become popular
- Increased demand for lower-alcohol wines
- Medium-sweet German wines and fortified wines going out of fashion

What factors could influence a wine's reputation? - Answer -- Good reviews from
leading publications and critics
- Online influencers and KOLs
- Presence in popular culture, e.g., films television series, music lyrics or celebrity
lifestyle news
- Peer opinions

What are price-sensitive markets? Give examples - Answer -Markets where consumers
are unwilling to pay more than the lowest price possible for the style of wine they want
to buy. E.g., Germany, UK

What can producers do to retain customers in price-sensitive markets? - Answer --
Competition is fierce - reduce price or simply choose not to sell
- Reluctant to pass on increases in production costs to consumers
- Try to build up 'brand loyalty'

Explain 'premiumization' - Answer -- Consumers are increasingly willing to pay more for
individual bottles of wine, often because they are buying less wine by volume
- Happens in USA even in UK

List major economic factors that influence demand for wine - Answer -- Strength of
economy
- Fluctuations in currency exchange
- Changes to the market

Give examples in which the strength of economy affect wine demand - Answer -- 2008
financial crisis: champagne demand falls, Prosecco grew; trade wine for beer, cider etc

,- Chinese economy growing: emerging middle class chasing aspirational wines

In what kind of market does currency fluctuation have the most significant impact on the
demand for wine? - Answer -Price-sensitive market

When a wine-exporting country's currency gains value compared to that of the importing
country, what can a producer do? - Answer -- Increase wine price and losing sales
- Keep the price and lose profit

When a wine-exporting country's currency loses value compared to that of the importing
country, what can a producer do? - Answer -- Lower price and boost sales
- Keep price stable and improve profits for future investment

What is one downside of weak currency on the part of the producer? - Answer -Costs
more to import equipment and supplies such as barrels, corks and yeast, which may
offset additional profits

How does changes to the market affect demand for wine? - Answer -- New
companies/products enter, others disappear
- Opportunities for competition
- However, if supply is limited, price increase is possible

List major legislative and political factors that affect demand for wine - Answer -- Laws
prohibiting or limiting alcohol sale
- Government policies to reduce alcohol consumption
- Taxation
- International trade
- Wine laws

Give examples of laws that limit alcohol sale - Answer -- Monopoly
- USA three-tier system
- Min drinking age
- Limit hours in the day for alcohol sale

Give examples of government policies to reduce alcohol consumption - Answer --
France: Loi Evin in 1991, restrict alcohol advertising
- Scottish: min unit price: GBP(75cl bottle with 12% considered to have 9 units)
- Blood alcohol concentration (BAC)

What are two impacts of taxation on wine? - Answer -- Reduce consumption
- Major venue generator for many governments

List types of taxes applied to alcoholic drinks - Answer -- Sales tax (VAT in EU)
- Specific excise duties on alcohol, payable at the point of manufacture
- Minimum pricing mechanism

, List one example in which reduced tax has boosted wine sales - Answer -In 2008, Hong
Kong abolished excise duty on wine with the aim of becoming wine trading hub of East
Asia

What is tax on imported goods called? - Answer -Custom duties / trade tariffs

What non-member states have entered into trade agreements with EU? - Answer -
South Africa and Chile

What is embargo - Answer -An extreme form of protection in which a country bans
imports from or exports to a particular country

Give examples of wine laws - Answer -Geographical Indications (GIs): Protected
Denominations of Origin (PDOs) and Protected Geographical Indications (PGIs)

How do GIs affect wine demand? - Answer -- Reputation
- Increase recognition and demand for wines from that region
- Allow price increase

How can wine laws negatively affect wine production? - Answer -- Many limitations such
as grape varieties, methods of production, maturation periods etc
- Slow to react to changes in consumer preferences

What factors in production could influence wine supply? - Answer -- Area under vine
- Human factors
- Natural factors

Which country has seen the biggest growth under vine recently? - Answer -China: now
second largest area under vine, seventh largest producer

What factors have resulted in the loss of vineyard land? - Answer -- Vine pull schemes
- EU restrictions on planting new vineyards
- Conversion of vineyard land to other uses
- Abandonment of rural areas

What is 'wine lake'? - Answer -By the mid 1980s, EU wine production was much greater
than demand, creating a surplus that came to be known as the 'wine lake'

Where have vine pull schemes mainly occurred? - Answer -- Southern France, Italy and
Spain
- Australia, New Zealand, Argentina

Give examples where conversion of vineyard land to other uses have occurred - Answer
-- Wine grapes are relatively low value
- Elgin, South Africa: replaced with apples
- Santa Clara Valley or Silicon Valley for business

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