Boycott or Buycott?: Internal Politics and Consumer Choices

1 Introduction

Do political tensions affect consumer choices? Firms are very often threatened by consumer boycotts that intend to modify their business strategies and behavior with different objectives such as the defense of the environment or the protection of workers’ rights. Often things get more complicated than this and boycotts on firms are caused by more general political conflicts. Examples of this kind of boycotts arise when, due to interstate tensions, consumers from one country are called to boycott products imported from another country. There are many instances of this kind of boycotts and economists have long disputed about their likely economic impact. On the one hand, free riding problems, common to any collective action phenomenon, are an obvious hurdle to significant reductions of individual consumer purchases. On the other hand, though, consumers are sometimes led by their animosity against products and firms coming from a country that has somehow offended them and the country they belong to. In this paper we take on this issue and examine the consequences of boycott calls on sales of Catalan sparkling wine (cava) in the Spanish market during episodes of intrastate political tensions in Spain.

Catalonia is a relatively rich region in the northeastern corner of Spain, a southern European country (see Map 1). It has its own language and a long history of political conflicts with Spain about matters such as culture, language, education, autonomy and self-determination, public investments or taxation (see Paluzie 2010). From time to time, when the political temperature rises, this leads to demands for greater autonomy (especially related to fiscal matters) and even secession from some sectors of Catalan society. One of the reactions of some parts of Spanish society to these political demands from Catalan politicians and electorate has been to call for consumer boycotts against Catalan products.

Map 1:

Catalonia, Spain and Europe.

One of the boycott episodes with greater impact in the media took place from 2005 onward, after the approval of the project of a new Statute of Autonomy in the Catalan Parliament (September 30) and its subsequent negotiation with the Spanish political parties in the Spanish Parliament. This process triggered what some observers called the “cava boycott” (cava is the name of a popular sparkling wine which is mainly, but not only, produced in Catalonia). Although the call from the organizers was for a general boycott on many Catalan products, the truth is that a great deal of the mass media attention was devoted to this particular item. The main objective of the paper is to study the consequences of the boycott on sales of Catalan cava in the different regions of the country. The main contributions of the paper are to show the different reactions of consumers and to rationalize them appealing to models of boycotts that include both the free riding and animosity motives. These are discussed in more detail in Section 2.

There are several papers in the literature that study the impact of consumer boycotts due to international political disputes on different product sales. Several of them use, like ours, data of direct sales to consumers. Thus, Ashenfelter, Cicarella and Shatz (2007) and Chavis and Leslie (2009) study the case of French wine in the United States during the Iraq war in 2003, which the French government strongly opposed. Pandya and Venkatesan (2014) look at the same historical episode, but concentrate on changes on a more diverse set of product categories sold in supermarkets. Hong et al. (2011) examine the case of French automobiles in China during the Beijing Olympic Games in 2008, after a series of political clashes between the Chinese and French governments on the political situation in Tibet and human rights issues. Clerides, Davis and Michis (2015) study the case of American soft drinks and fabric detergent in seven Arab countries during the Iraq war, which unleashed a wave of anti-American sentiment there. Fouka and Voth (2013) look at German car sales in Greece during the Euro crisis, when Greek and German governments clashed over the terms of the European Union bailout of Greece (see the table in Appendix A for more details about these papers). Our paper follows an identical approach, although with the particularity that it deals with the effects of boycott calls due to political tensions within a state. A different approach is taken in Michaels and Zhi (2010), Davis and Meunier (2011) and Fuchs and Klann (2013), which focus on how political conflict and the worsening of public attitudes in different countries (sometimes even implying calls for boycotts) affect aggregate bilateral economic relationships (trade, investment flows, etc.). A recent paper by Fisman, Hamao and Wang (2014) studies the impact of political tensions between Japan and China and subsequent boycott calls on the value of firms.

The main body of data we use come from Symphony IRI Group (Spain) and consists of four-week sales (revenues in euros and quantities in liters) in the Spanish market of different types of cava and related products (sparkling wine) running from 2001 to 2012. Moreover, the data are disaggregated for eight different regions within the Spanish market. To determine with high precision the boycott period we use data on the number of news which mention the issue of the boycott and appear in the main national Spanish daily newspapers.

The results of our econometric analysis indicate that the boycott calls triggered different consumers’ reactions in different territories. While consumers in some Spanish regions followed them and reduced their purchases of Catalan cava, there was also an anti-boycott reaction of Catalan consumers which led them to increase their consumption of the product. These results can be rationalized by the predictions of the models of boycotts discussed in Section 2 and, moreover, are also consistent with some anecdotal evidence gathered from reports in the media at the time. As a result of this, the boycott calls had an insignificant impact at the Spanish aggregate level, itself a direct consequence of the combination of a negative impact of the boycott in some regions and a positive impact in the Catalan market. The quantitative implications of the analysis are as follows. For the regions that suffered a negative impact, the boycott amounted to a drop of revenues from sales between 5.8 and 9.8 percent over the period 2004–2007, depending on the region. For the regions that enjoyed a positive impact, the increase in revenues is estimated to be between 7.3 and 8.4 percent over the same period.

The rest of the paper is organized as follows. Section 2 describes the political background of the cava boycott calls, making explicit their timing and possible causes. Section 3 describes our data. Section 4 presents the economic analysis of the boycott and contains the main results of our work. Section 5 provides additional empirical results which help look into the specific mechanism of the boycott. A final section summarizes the arguments and concludes.

2 Political Economy of Boycotts: The Case of Catalan Cava in Spain

The general issue of the interrelation between economic interdependence (trade and financial flows, migration and workers mobility, etc.) and the existence of political conflicts among different countries has always been at the center of interest in Political Economy. ^[1] A particular channel by which political hostilities may end up causing lower degrees of economic interdependence among countries is the alteration of consumer choices and, in particular, the organization of consumer boycotts against products imported from countries regarded as political antagonists for some reason. When and why boycotts are effective are questions on which economic models can shed some light. On the one hand, standard economic theory predicts that boycotts, like other instances of collective action, are subject to free riding problems that seriously limit their success chances (see John and Klein 2003). On the other hand, Pandya and Venkatesan (2014) (see references therein) describe how the political and emotional reactions to international conflict may drive changes in consumer behavior and trigger waves of animosity against companies and products that consumers relate to a foreign country regarded as hostile. According to their description, political disputes may generate anger, desire for retaliation and greater willingness to participate in punitive collective actions such as consumer boycotts. ^[2] This type of boycott is sometimes called surrogate boycott. ^[3] The companies that are targeted by boycotters are not directly responsible for the egregious act that causes consumers’ anger and, thus, have a very limited path of action to placate it. Moreover, even though boycott calls are generally directed to all products coming from the offending country, often only a few emblematic and representative items (or companies), very easily recognizable by a vast majority of consumers, end up being penalized in a substantial way. These two circumstances make this class of boycotts particularly arbitrary from a company’s point of view but, at the same time, might reduce the motivation of the consumers against the targeted company and the intensity of the boycott actions. Thus, boycotts of this type may also trigger waves of sympathy toward the targeted companies and products, therefore offsetting the main intended effects of the boycott (see John and Klein 2003, p. 1198). ^[4] These three elements, free riding, animosity and sympathy, are the theoretical arguments analyzed in the economic literature on boycotts with which the main empirical results of the paper can be rationalized.

Although so far we have only mentioned political tensions at the international level, the logic of the arguments follows in cases of conflicts that take place within a country. Typically, some consumers may choose to express their disconformity with decisions taken by governments at regional or local level by refusing to purchase goods made by firms located in the geographic area whose governing body or electorate has offended them (Friedman 1999 refers to many such cases in the United States). This also applies to the specific case we analyze in this paper.

The political scenario in Catalonia has always been characterized by frequent political and legal disputes between the Catalan and Spanish governments about questions such as the distribution of fiscal revenues and the degree of devolution (see Paluzie 2010 and Castells 2014 for more details on these questions). In part as a result of this troublesome relationship, a general agreement was reached in the Catalan Parliament to approve a new Statute of Autonomy in September 2005. The new law declared that Catalonia was a nation and its basic objectives were to improve the fiscal position of the regional government and safeguard its jurisdiction on matters regarded important such as education. The approval of the new Statute was not very well received in Spain. There were political objections from the main Spanish parties, which considered that devolution was going too far and accused the proposal of lack of solidarity. There was also a noisy controversy about whether parts of the new law were contrary to the Spanish Constitution. In the middle of this deteriorated political environment the new Statute was discussed, amended and approved by the Spanish Parliament and, then, submitted to referendum to the Catalan electorate in June 2006.

This was the strained political context in which boycott calls appeared and were propagated in 2005. Although the main boycott calls were generally addressed to a vast variety of Catalan products, the truth is that the media and public attention were mainly devoted to the boycott against a very representative Catalan consumer product, cava, so that the boycott has been known as the cava boycott. In fact it is difficult to find reports about other products affected by a similar boycott at the time.

Was the cava boycott effective? Was it equally intense everywhere in Spain? News reports at the time claim that Catalan cava producers complained about lower sales, especially around the Christmas campaign in 2005. The media also reflects that the boycott was especially effective in some parts of Spain. Contrary to this, there were also indications that purchases of Catalan cava in Catalonia increased during the period, which might be evidence that Catalan consumers engaged in some sort of buycott. The following sections of the paper analyze the available data and shed some light on these issues.

3 Description of the Data

We use two main different sources of data in our analysis. First, we have data for sales of sparkling wine (cava and related products) in the Spanish market (dependent variable) and, second, the number of news which mention the issue of the cava boycott in the five leading Spanish newspapers at the time (independent variable).

3.1 Dependent Variable

The data are from Symphony IRI Group (Spain) and correspond to sales of sparkling wine in supermarkets and hypermarkets (the firm collects the information from a universe of approximately 17,000 commercial outlets of this type). These data fit well our research objective, which is to evaluate the impact of political events on the behavior of final consumers. However, it is less adequate to make a precise assessment of the boycott from the producers’ point of view, because it leaves out the part of the production which is distributed through hotels and restaurants and also firms that elaborate gifts that companies offer to customers and employees (an important tradition in Spain, especially around Christmas). ^[5] The data are available both for quantities (liters) and revenues (euro) and consist of observations on sales for 13 four-week periods per year for the period spanning from 2001 to 2012 (although we only have the first four observations for the last year). This is a total of 147 time periods. In comparison with some of the papers mentioned in the Introduction, the relatively large number of years of our sample will allow us to introduce a detailed consideration of the long-term time trends observed in the data, something that will be important for some of our results. The data indicate that sales of sparkling wine are highly seasonal in Spain and around 30% of the total value of sales takes place in the last four weeks of the year.

We do not have detailed observations for all specific products or commercial brands of sparkling wine in sale in the Spanish market. The observations we have correspond to aggregate categories such as “French champagne,” “private label cava” (cava commercialized under private labels by supermarket chains), “non-Catalan cava” and so on. There are 17 such categories in our database. To avoid confusion we will refer to these categories as varieties of sparkling wine. A more detailed description of our data and this variety classification can be found in Appendix B.

For our purposes, the most relevant distinction we will make in the data is between Catalan cava, which we will define as cava which is clearly perceived to be produced in Catalonia, and the rest of sparkling wine, which includes cava produced in other parts of Spain, private label cava (although most of it is produced in Catalonia) and other sparkling wines such as French Champagne, Granvas wines (natural sparkling wine different from cava whose second fermentation takes place not in bottle but in large metallic containers) and others (see Appendix B for details). Catalan cava has a large, although clearly declining, share in the market for sparkling wine both in revenues and in quantities during the period (Table 1). This secular reduction in share is largely due to two different factors: (1) the increase of very cheap cava sales commercialized under private labels; and (2) the increase in the sales of French Champagne, a comparatively very expensive product. This observed increasing trend in the consumption of Champagne and the cheapest varieties of cava occurs for all the years of our sample (see Table 1). It will be crucial for our objectives to disentangle the effects of political tensions and the subsequent calls for boycotts and the long-term trend effects we observe for the whole period, whose causes should be attributed to very different factors.

Table 1:

Market shares (as % of total sparkling wine market in Spain).

Year	Catalan cava		Rest of sparkling wine
	Total	Dominant firms	Total	French Champagne	Private label	Non-Catalan cava
2001	82.93	72.55	17.07	5.81	7.53	0.82
	77.98	71.40	22.02	0.89	14.71	0.95
2002	81.64	70.62	18.36	6.30	7.12	0.78
	76.96	70.24	23.04	0.99	14.47	0.98
2003	80.80	69.61	19.20	6.71	7.97	0.67
	75.21	68.32	24.79	1.03	16.87	0.83
2004	79.48	67.85	20.52	7.73	8.53	0.69
	73.68	66.02	26.32	1.16	18.41	0.87
2005	76.10	63.09	23.90	9.27	9.07	1.22
	70.58	61.21	29.42	1.38	19.59	1.46
2006	73.87	60.77	26.13	11.06	9.30	1.31
	68.18	59.61	31.82	1.73	20.89	1.57
2007	73.18	59.61	26.82	11.51	9.82	1.32
	65.92	57.61	34.08	1.87	23.15	1.67
2008	72.01	58.69	27.99	11.30	10.91	1.27
	62.77	54.45	37.23	1.88	25.72	1.59
2009	71.46	56.97	28.54	11.67	11.66	1.30
	62.14	52.09	37.86	1.95	27.53	1.59
2010	71.01	55.40	28.99	12.13	11.81	1.12
	62.23	49.75	37.77	2.02	27.90	1.37
2011	69.96	53.72	30.04	12.79	12.44	0.84
	61.53	47.18	38.47	1.99	29.01	1.01

^[6]

Cava is a sparkling wine which is mainly produced in Catalonia. Only 159 municipalities in Spain form the area where cava can be produced. Of those, 133 are in Catalonia and 26 in the rest of Spain. The average number of firms producing cava during the period 2001–2012 was 267, but only 10% of them were located outside Catalonia. ^[6] Not surprisingly, the share of non-Catalan cava in our data is very small for all years, reaching a maximum in 2007 (Table 1).

Regarding the market structure of the cava sector it is worth mentioning that there are two clearly dominant firms (to which we refer as Company A and B; see Appendix B for more details), both selling cava under different brands, which together have a share higher than 50% of total revenues. Their share of the market, though, has dramatically decreased throughout the period (see Table 1). The fact that this fall has been much more acute for quantities than revenues is a clear indication that the two firms have been concentrating their sales in the higher price segments, probably as a consequence of the growing competition of private label and other brands in the lower end segment. The rest of the sector has a very atomistic structure: there are two medium-sized firms (which are clearly specialized in the opposite segments of the market) and a large number of small firms which together have a share of the market for sparkling wine which is around 6% (in revenues) (see Appendix B for a more detailed description of the data).

The data are also disaggregated by eight different territories in Spain which include the two main metropolitan areas (Madrid, in the geographical center of Spain and political capital of the country, and Barcelona, the main city in the region of Catalonia) and six other regions which are North East (NE), East (E), South (S), Center (C), North West (NW) and North (N). They group all Spanish provinces (except the Canary Islands) according to the specific geographical criteria used by the provider of the data, which do not correspond to administrative and political divisions in Spain (see Map 2).

Map 2:

Spanish regions for disaggregated data.

These regions have very different relative sizes with respect to the whole Spanish market for sparkling wine. Figure 1 shows the relative size of each region in our data. This disaggregation of the data will be very useful for our purposes, since news reports at the time of the boycott reflected a very different behavior of consumers in each region. Not surprisingly, they did not echo any negative effect of the boycott in the Metropolitan Area of Barcelona and Region NE, which includes the rest of Catalonia. ^[7] As a matter of fact, the boycott calls could even have had a positive impact on purchases of Catalan cava in Catalonia. ^[8] The other six regions are where the boycott is more likely to have had a more significant repercussion. According to some news reports published at the time, the Metropolitan Area of Madrid and Region E (of which Valencia is the main town) are the zones where the boycott had the largest effects. ^[9]

Figure 1:

Relative size of each region in the market for sparkling wine (2001–2012). *MAB: Metropolitan Area of Barcelona; **MAM: Metropolitan Area of Madrid.

3.2 Independent Variable

The second main source of our data comes from counting the number of news that mention the issue of the cava boycott and appeared in the five leading Spanish newspapers at the time. ^[10] We take this measure (“total number of news”) as a way of approximating the actual timing of the boycott and the fact that they show a strong positive correlation suggests that it is a reasonable proxy for the boycott call (Table 2). ^[11]Figure 2 shows the distribution of the number of news from 2001 to 2012. ^[12]

Table 2:

Correlations between news that appeared in different newspapers.

	La Vanguardia	El Mundo	El País	Abc	El Periódico
La Vanguardia	1
El Mundo	0.60	1
El País	0.52	0.40	1
Abc	0.82	0.78	0.52	1
El Periodico	0.94	0.66	0.57	0.89	1

Figure 2:

Number of news that mention the Catalan cava boycott in five leading Spanish newspapers.

4 Economic Analysis of the Boycott

Our economic analysis of the boycott is divided into two different parts. To have a perspective on how firms reacted to the boycott calls we first look at the evolution of prices and advertising expenditures before and after the end of 2004. We then look at the effects of the boycott on sales of cava and related products in different regions in Spain.

4.1 Prices and Advertising Expenditures

Figures 3 and 4 display the evolution of the unit value of cava (calculated dividing revenues by quantities for each period) for all varieties sold by the two main firms in the market, which represent more than 80% of the total value of sales of Catalan cava in the Spanish market (see Appendix B). It must be taken into account that we do not have direct data on product prices and, moreover, our varieties in these cases include different products which are marketed under the same commercial brands. This means that changes in unit values may be due to changes in prices and also to changes in the mix of products of a same brand purchased by consumers. We choose to present prices for a short period before and after the beginning of the boycott (2004–2006), so that changes in the composition of products within a brand are minimized. Figure 3 presents the evolution for higher value varieties (A1, B1 and B5) and Figure 4 does the same for lower value varieties (A2, A3, A4, B2, B3 and B4). The vertical line in the two figures signals the last period of 2004, when boycott calls started.

Figure 3:

Prices for varieties of Catalan cava (higher value), 2004–06.

Figure 4:

Prices for varieties of Catalan cava (lower value), 2004–06.

The figures do not seem to indicate any strong reaction of firms in the form of changes of prices above or below trend at the time of the boycott, especially for the varieties which are quantitatively more important (A1 and B1 in Figure 3). Only variety A3, which represents relatively small amounts of sales, might be affected by a reduction of prices after the last period of 2004.

Table 3 presents data on rates of growth of advertising expenditures for the period 2005–2009 for the two dominant firms in the market, the whole sector of cava and the entire advertising market in Spain.

Table 3:

Advertising expenditures (annual growth rate).

Year	Firm A	Firm B	Cava	Spain
2005	13.7%	−28.7%	−10.8%	7.8%
2006	5.2%	−8.0%	17.6%	6.3%
2007	−3.6%	104.3%	28.6%	9.3%
2008	−4.5%	−36.6%	−28.8%	−7.5%
2009	−26.4%	−45.3%	−23.7%	−14.9%

^[14]

We do not observe a particularly strong immediate reaction of firms in the sector to the boycott calls in terms of greater expenditures on advertising. Firm A has positive rates of growth in 2005 and 2006, but only in the former year growth is higher than for the whole economy. Firm B has even negative rates of growth for these years, although it more than doubles its expenditures later in 2007. The relatively important rate of growth for the whole sector of cava in 2006 is the effect of sizeable expenditure campaigns by firms that had not been active in this market before, while firm B is mainly responsible for the even higher rates of growth in 2007. Finally, the effects of the Great Recession are evident for years 2008 and 2009 both for the sector and the aggregate economy.

5 Substitutes of Catalan cava and the Impact of the Boycott

Finally, as in Chavis and Leslie (2009), we examine the effectiveness of the boycott for varieties of sparkling wine in two different price categories, estimating our baseline model separately for subsamples of high- and low-value varieties. As we shall see, this analysis (together with some of the results from Table 6) will shed some light on the specific mechanism of the boycott, reveal some apparently paradoxical results and, finally, provide some hints which may explain, at least partly, why the boycott was not more widely successful.

The final exercise will consist in estimating the baseline model segmenting the sample according to the average value of the different varieties of sparkling wine. We have two general kinds of sparkling wine in our sample: 7 high-value varieties (8,232 observations) and 10 low-value varieties (11,760 observations), as categorized in Appendix B.

There are some important differences in the results of the estimations for the two samples, presented in Table 7. The first thing worth noticing is that the results corresponding to the sample of high-value varieties are qualitatively very similar to the results presented for the entire sample (Table 4, column 3). As there, the coefficient of the price variable is positive and statistically significant. Also, the results are consistent with the existence of significant levels of boycott to higher value Catalan cava in the same regions highlighted in Section 4, that is, the MAM, Region E and Region S. In contrast, when we examine the results for the sample of low-value sparkling wine things look quite different. The coefficient of the price variable is now negative and statistically significant. At the same time, looking at the value of the coefficients for the regions mentioned before we can conclude that the impact of the boycott is inexistent for Region S and MAM (in fact the coefficient in this case is even positive). Sales of cheaper Catalan cava in Region E, instead, appear to be clearly affected by the negative impact of the boycott campaign. Notice that the finding, highlighted in the previous section, that evidence of boycott behavior in MAM and Region S could be found by looking at revenues but not by looking at quantities is consistent with the fact that the boycott was mainly concentrated in the high-value segment of the market and consisted of substituting expensive French Champagne for cheaper Catalan cava.

The fact that the consumption of cheaper varieties of sparkling wine is more responsive to prices than that of more expensive varieties is a result which is consistent with our basic economic intuition about consumer behavior. It must be taken into account that the main substitute for high-value Catalan cava is French Champagne, a much more expensive product. Lower price varieties, instead, have much closer substitutes. The fact, however, that the impact of the boycott is stronger for expensive Catalan cava than for cheaper varieties is an apparently paradoxical result from the point of view of the models of boycotts we cited in Section 2. This is because, given some levels of animosity which may induce consumers to reduce purchases of Catalan cava, it is less costly to do so for buyers of cheaper varieties, who may have close and easily available alternatives. In comparison, buying French Champagne instead of relatively expensive Catalan cava implies a much higher cost for boycotters, a fact that should discourage them from embracing this behavior. Summing up, our empirical results in Table 7 are not, at least apparently, consistent with a model that predicts that, taking as given levels of animosity from political confrontations, boycotts should be more prevalent in those segments of the market for which the targeted good has better substitutes and, hence, imply lower costs to consumers who decide to reduce their purchases of the good which is the object of the boycott.

We propose a reasonable explanation to this apparent paradox, based on the perceptions of Spanish consumers of cava about the product. Cava is a product which is generally perceived in the Spanish market to have a clear and unmistakable Catalan origin. In part this explains why, even when boycott calls around 2005 were general against many Catalan products, only the cava sector was affected. In other words, it is an emblematic product of its country, a type of product we know is especially liable to be affected by boycotts. Nevertheless, and for the same reason, consumers perceive it as a product with few substitutes other than French Champagne, a product which is much more expensive. Non-Catalan cava, the most obvious substitute for boycotters, was a largely unknown alternative to Spanish consumers. Moreover, due to the specific regulations of the sector, the volume of cava not produced in Catalonia is very small and its growth possibilities very limited (it can only be produced in a fixed number of municipalities). This left consumers of cheaper varieties of Catalan cava with very limited alternatives, since French Champagne was out of reach for most of them and explains why boycott attitudes were more prevalent among consumers of more expensive varieties. A possible exception to this type of behavior may have occurred in Region E, which is the only region where the impact of the boycott on lower value Catalan cava is substantial. This might be explained by the fact that this region concentrates 40% of all non-Catalan firms that produce cava in Spain and, consequently, there non-Catalan cava is a much better known substitute for Catalan cava.

In summary, the results of this section hint at the possibility that strong perceptions of consumers about the Catalan origin of cava made it particularly liable to be affected by a boycott. At the same time, however, the perception of absence of substitutes (other than much more expensive French Champagne) limited its widespread impact. In other words, if the boycott had focused on some other good with a larger range of substitutes from Spanish producers, it would probably have resulted in a greater negative impact on Catalan firms.

6 Conclusions

This paper analyzes what has been known as the cava boycott in Spain. The approval in September 2005 of a new project of Statute of Autonomy of the region of Catalonia by the Catalan Parliament and its subsequent negotiation with the Spanish political parties in the Spanish Parliament caused a great deal of political controversy in the country. Partly as a consequence of this, there were boycott calls against Catalan consumer products, although most media attention was devoted to a particularly popular item, Catalan sparkling wine (also known as cava). The results of our analysis are indicative of different behavior of consumers in different regional submarkets. Thus, consumers from some regions in Spain, particularly in the South, the East coast and Madrid, decreased their purchases of Catalan cava during the period. On the contrary, Catalan consumers counteracted the boycott calls and, relative to a long-term time trend of diminishing consumption, increased their purchases of Catalan cava during the boycott years. Finally, we do not observe any impact of the boycott calls in the consumption choices of residents in the rest of Spain. As a result of this, the boycott calls had an insignificant impact at the Spanish aggregate level. The analysis of different segments of the sparkling wine market (higher and lower prices) allows us a more detailed exploration of the mechanism of the boycott and may explain why cava, a product of unmistakable Catalan origin, was the focus of the boycott campaign and why its impact was limited by the absence of close substitutes.

Our study contributes to a large body of literature in Political Economy that investigates the relationship between political conflicts and economic outcomes and, more specifically, consumer choices. While most studies in the field are about political disputes in the international arena, we analyze a case of a consumer boycott due to political struggles within a country. In particular, we show that the negative impact of the boycott on sales of Catalan cava in several regions in Spain, due to consumers’ animosity against some decisions taken by Catalan political actors, was offset by higher sales of the product in Catalonia. These were the result of a positive reaction of Catalan consumers, perhaps as a manifestation of their solidarity toward Catalan producers in the context of a politically charged environment. This is an interesting result, because there are not many examples of empirical studies documenting the existence of buycotts. The simultaneous presence of boycotting and buycotting behavior might be a prevalent characteristic of consumers’ reactions in the face of political tensions, especially when these are long lasting and take place within a state, giving rise to politically motivated consumer decisions. It might become more relevant in spaces like Europe, which is economically very integrated while, at the same time, still experiencing the effects of current and historical political rivalries among different countries.

We think that there are several avenues for further research on this issue. Most obviously, one would like to undertake a much more detailed investigation of the sociological and political factors that could explain the different boycotting behavior by consumers in different Spanish regions. Also, given the limited amount of research on the buycott phenomenon, we think it is worth exploring in great detail the nature of its causes and under which circumstances collective action problems can be overcome to give rise to consumption decisions that are driven, at least partly, by political considerations.