Page 1 Australasian Agribusiness Review – Vol. 22 – 2014 Paper 1 ISSN 1442-6951 Can we explain variations in winery ratings in Victoria? Euan Fleming, Stuart Mounter, Bligh Grant and Garry Griffith 1 UNE Business School, University of New England, Armidale, NSW ----------------------------------------------------------------------------------------------------------------------------------------- Abstract The scoring of wines and the ratings of wineries is the source of much debate. In this paper we attempt to explain variations in winery ratings in Victoria by examining two winery rating systems, the winery 5-star ratings system of Halliday and the WineBoss version that modifies the Halliday system, to obtain a consensus industry rating from a variety of sources; in conjunction with a limited number of other data about the wineries that are rated. We use ordered logit models and odds ratios on a sample of rated Victorian wineries (291 in the Halliday sample and 331 in the WineBoss sample) to see which predictor variables increase the odds of a winery being in a higher-rated category. Wineries that are older, use a consultant winemaker and/or produce predominantly red wines are more likely to be in a higher-rated category than those wineries that do not; conversely, wineries that use a contract winemaker and/or are located in a number of particular regions of Victoria are more likely to be in a lower-rated category than those wineries that do not. All of these results are as expected and confirm previous research. However, neither the size of the winery in terms of output nor whether the winery has other revenue sources, such as a restaurant, has any significant correlation with winery rating. The paper concludes with some suggestions for further research. Introduction Anderson and Wittwer (2013, Table 4) have demonstrated that real producer price changes for Australian wine declined most dramatically for non-premium wines over the period 2009 to 2011. Consequently, and notwithstanding the imprecision, inconsistency and prejudice involved in the determination of wine prices (see, for example, Derbyshire 2013; Grant, Dollery and Hearfield 2011; Garcia-Parpet 2008; Trubek 2008) many winemakers in Australia have recognised the need to attach a perception of premium quality to their products in order to maintain profits in the face of intensified competition at lower price points, both domestically and globally. Alongside reinforcing claims to excellence attached to particular regions within Australia’s geographically diverse wine industry (see, for example, Banks and Sharpe, 2006), a recent development has seen the formation of a consortium of Australian producers under the banner ‘Australian First Families of Wine’, which has sought to highlight ideas of tradition and quality in the Australian industry on the global stage (AFFW, 2013). However, a more longstanding method for achieving the much sought-after cachet is to earn high ratings from wine rating experts. In Australia, as elsewhere, these points-based ratings systems are awarded to both specific wines (see, for example, Wine Selector, 2013; Geddes, 2013) as well as particular wineries. Arguably, the best-known expert who rates both wines and wineries is James Halliday (Halliday 2013a). 1 We are grateful for the comments made by a reviewer, and have made liberal use of the material included in these comments in revising the paper. Any errors made, however, remain the responsibility of the authors.