Stanford Business

AUGUST 2006


Consumer Boycotts Do Work—Just Ask French Winemakers


Illustration by Leo Espinosa

by Marguerite Rigoglioso

Calls to boycott French products in 2003 may have cost French winemakers $112 million in sales in the United States, say Larry Chavis and Phillip Leslie. Based on their study of scanner data from supermarkets and large stores, the researchers conclude boycotts really do work.

Chavis, a PhD student, and Leslie, assistant professor of strategic management, studied the American boycott of French wine launched in early 2003 in angry response to France’s opposition to the war in Iraq. Their analysis shows a significant 26 percent drop in French wine sales in the United States at the peak of the boycott, and an average 13 percent drop over the six months of the event.

Other studies of boycotts showed small effects, no effects, or even, strangely, positive effects. “Those studies examined only changes in stock prices in response to boycotts,” Leslie says, “but stock prices are influenced by many factors and may not be a reliable indicator.”

Chavis and Leslie confined their study to scanner data from large merchandisers in four cities in which wine consumption is typically large: Boston, Los Angeles, Houston, and San Diego. Extrapolating from the figures obtained, they concluded that French wine companies may have lost a total of $112 million in U.S. wine sales during the boycott.

They measured the intensity and duration of the boycott by counting newspaper articles that appeared on the topic in the Wall Street Journal, New York Times, and USA Today, as well as plugs for the boycott by Bill O’Reilly on his TV show The O’Reilly Factor. “We didn’t notice any particular drop in sales following any of O’Reilly’s outspoken commentaries,” Leslie says. Front-page newspaper coverage seemed to affect French wine sales more than less prominent reports.

Boycotts are of interest to Stanford faculty and students who are “looking at non-market issues—how business problems that go beyond regular competition dynamics, such as regulation, lobbying, foreign policy, and so forth, affect the bottom line,” says Leslie. “Our study in particular documents an example of how government foreign policy can indeed impact business profitability in unanticipated ways.”

Back to Top