Kentucky Wine Industry Study
Kentucky Wine
Industry Study
Prepared by
Binoy, Accamma
Singto, Nujjari
Xing, Chao
Sullivan University
Abstract
The object of this research is to estimate the economic impact by Kentucky Tobacco Settlement Trust investments in the wine industry, including market structure and pricing. Research methodology is used by the five competitor forces model by Michael E. Porter.
Introduction
In the last decade, tobacco has been one of the most beneficial crops in Kentucky, the second-largest place where 82% of all tobacco is grown (Brown, May). It has become a majority crop for farmers. However, a number of factors, such as health concerns, have contributed changes in the tobacco industry. The anti-smoking campaigns and the National Tobacco Growers Settlement Trust were created to reduce the production and sales in tobacco by correcting funds from four big tobacco companies.
According to the article posted by Al Cross (2006) in University of Kentucky School of Journalism and Telecommunications web site, “The $206 million invested so far in Kentucky agriculture has helped shake farmers’ historic allegiance to tobacco, encouraged diversification and upgraded the state’s cattle industry, the largest in the Eastern U.S.” This means the payment from the trust is made directly to improve other Kentucky industries, including wine. However, in order to finance this settlement, those companies have to increase their price to lower the demand of smokers. Under this condition, unfortunately, 60 wineries in Kentucky have to face the budget cut problem.
Background
Looking at Kentucky wine market feasibility assessment (2002), Kentucky’s wine industry began in 1798 at Jessamine Country by Jean Jacques Dufour. The state had become viticulturally successful. However, following the Prohibition in 1920, Kentucky’s wine industry had replaced by other crops and was out of business.
In the same research, there are currently about
Industry Study
Prepared by
Binoy, Accamma
Singto, Nujjari
Xing, Chao
Sullivan University
Abstract
The object of this research is to estimate the economic impact by Kentucky Tobacco Settlement Trust investments in the wine industry, including market structure and pricing. Research methodology is used by the five competitor forces model by Michael E. Porter.
Introduction
In the last decade, tobacco has been one of the most beneficial crops in Kentucky, the second-largest place where 82% of all tobacco is grown (Brown, May). It has become a majority crop for farmers. However, a number of factors, such as health concerns, have contributed changes in the tobacco industry. The anti-smoking campaigns and the National Tobacco Growers Settlement Trust were created to reduce the production and sales in tobacco by correcting funds from four big tobacco companies.
According to the article posted by Al Cross (2006) in University of Kentucky School of Journalism and Telecommunications web site, “The $206 million invested so far in Kentucky agriculture has helped shake farmers’ historic allegiance to tobacco, encouraged diversification and upgraded the state’s cattle industry, the largest in the Eastern U.S.” This means the payment from the trust is made directly to improve other Kentucky industries, including wine. However, in order to finance this settlement, those companies have to increase their price to lower the demand of smokers. Under this condition, unfortunately, 60 wineries in Kentucky have to face the budget cut problem.
Background
Looking at Kentucky wine market feasibility assessment (2002), Kentucky’s wine industry began in 1798 at Jessamine Country by Jean Jacques Dufour. The state had become viticulturally successful. However, following the Prohibition in 1920, Kentucky’s wine industry had replaced by other crops and was out of business.
In the same research, there are currently about
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