Competition in the sparkling wine market in the Czech Republic

Abstract

Purpose Vine growing for the production of wine constitutes one of the major areas of agriculture of the Czech Republic, and in recent years, it has been qualitatively improved. The purpose of this paper is to find out whether oligopolistic market structures have come into being on the sparkling wine market in the Czech Republic, and whether some wine firms have a dominant position on the sparkling wine market. Design/methodology/approach The purpose of this study is to find, compare and carry out a statistical analysis of data on the production and sale of sparkling wines in the Czech Republic, in particular the indicators of the sales and profits of the dominant producer, Bohemia Sekt. In retail chains in the Czech Republic, the price of domestic and foreign sparkling wines was then compared with a comparative analysis. Findings The dominant seller of sparkling wine on the Czech market is Bohemia Sekt, which is also the largest domestic non-sparkling and sparkling wine producer. Bohemia Sekt sold 11 m bottles of sparkling wine on the Czech market in 2015 and maintained a 67 per cent share of the domestic market. Traditionally, Christmas time and the end of the year is the main season for selling sparkling wines in the Czech Republic, as more than one-third of the annual production of all wineries is sold at this time. Originality/value The paper presents a finding about the consistency of the prices of sparkling wines offered in retail chains in the Czech Republic. This confirms the validity of using the model of oligopolistic competition with a dominant company on the sparkling wine market in the Czech Republic. The dominance of Bohemia Sekt in the given market is mainly due to the loyalty of Czech consumers to this brand.