Does Religious Composition Shape Global Wine Trade? Insights from CAPTS Research

By Carlos Zurita and Sandro Steinbach

Religion plays a central role in shaping drinking behavior, often through social norms that encourage abstinence or strict moderation. The tension between these norms and alcohol consumption came into sharp focus during the 2022 World Cup in Qatar, when authorities banned alcohol sales in stadiums, sparking widespread public debate. While a growing body of research shows that cultural factors, such as religion and language, influence trade patterns, much of the trade literature still focuses on traditional policy tools such as tariffs and non-tariff barriers. When cultural factors are included, they are often reduced to simple proxies captured through bilateral indicators. In a recent paper, “Faith and Fermentation: The Impact of Religious Composition on Global Wine Trade” (Zurita and Steinbach, 2026), we take a different approach. Using a state-of-the-art economic model and a novel dataset of bilateral wine trade flows and country-level religious affiliation for 102 countries from 1988 to 2023, we examine how shared religious affiliation can facilitate or hinder wine trade.

Our findings point to two main lessons. We begin by breaking down countries’ religious composition into nine major groups: Roman Catholic, Protestant, Orthodox, Jewish, Muslim, Hindu, Buddhist, Other Christian, and Others, as shown in Figure 1. We then examine how shared religious affiliation between countries shapes wine trade, identifying which affiliations tend to promote wine trade and which tend to limit it. To make this concrete, consider France and the USA. Does a greater shared religious composition in each of the religious denominations translate into higher or lower wine trade? Using individuals with no religious affiliation as the benchmark, we find that a one percentage point increase in the share of respondents identifying with Other Christian denominations reduces wine trade by about 4%. By contrast, a one percentage point increase in the share of Protestants raises wine trade by approximately 0.7%. Applied to our France-USA example, these results imply that stronger similarities in Other Christian affiliation between the two countries are associated with lower wine trade, while greater overlap in Protestant populations is associated with higher wine trade.

Figure 1. Nine Major Religious Groups in World Values Survey by Haerpfer et al. (2022).

For our second lesson, we turn to a counterfactual exercise. We compare a world in which all wine tariffs are eliminated, holding everything else constant, with a scenario in which all countries share a Protestant religious composition. We focus on the ten largest wine exporters in 2023, the final year of our data: France, Italy, Spain, Australia, New Zealand, Chile, the United States, Germany, Argentina, and South Africa. The main results of this counterfactual analysis are summarized in Table 1. Eliminating wine tariffs leads to moderate gains. Total exports from these countries increase by between 1.1% and 12.8%, while welfare rises by 0.2% to 3.7%. Welfare in our setting reflects how much purchasing power people have, capturing changes in wages relative to the price index, and how trade imbalances affect how much they can ultimately consume. The results change markedly when we shift to the religious composition scenario. If countries align with Protestantism, total exports increase by between 64% and 205.9%, and welfare gains range from 3.5% to as high as 369.9%. These results suggest that reducing cultural differences may have a larger impact on trade costs than reducing tariffs.

Table 1. Percentage Changes in Counterfactual Scenario Analysis

	Panel (a) Scenario 1: Zero Tariffs Worldwide		Panel (b) Scenario 2: Global Religious Alignment
Exporter	Total Export	Welfare	Total Export	Welfare
France	5.5%	3.7%	122.2%	369.9%
Italy	3.7%	0.6%	64.0%	85.4%
Spain	1.1%	-0.1%	70.5%	80.7%
Australia	1.5%	0.2%	117.2%	161.3%
New Zealand	3.9%	0.9%	72.1%	115.7%
Chile	2.3%	2.8%	80.1%	174.6%
United States	12.0%	1.3%	205.9%	75.3%
Germany	4.4%	0.9%	198.0%	266.1%
Argentina	12.8%	-0.1%	107.6%	3.5%
South Africa	6.0%	3.6%	98.4%	263.8%
Note. The table shows the estimated changes of the most relevant variables in our counterfactual analysis. Panel (a) presents changes in the scenario of eliminating all wine tariffs. Panel (b) presents changes under the scenario that all countries fully share Protestant populations.

Our findings provide evidence that religion plays a significant role in shaping trade costs and wine trade flows. While prior trade studies capture cultural factors such as language or social distance through broad proxies, we isolate the effects of specific religious affiliations and find that their impact varies across importers and exporters, reflecting differences in norms toward alcohol consumption. We interpret these effects as trade frictions rooted in religious differences, which can restrict trade and, in some cases, exceed the impact of traditional policies such as tariffs. These results suggest that countries with lower religious alignment face higher implicit trade costs and stand to gain most from greater cultural convergence. For policymakers and industry stakeholders, the findings underscore the importance of cultural compatibility, particularly shared religious norms, in shaping market access, trade patterns, and export strategies, indicating that successful trade promotion may require going beyond traditional economic considerations.

References

Haerpfer, C., Inglehart, R., Moreno, A., Welzel, C., Kizilova, K., Diez-Medrano, J., M. Lagos, P. Norris, E. Ponarin & Puranen, B. (2022). World values survey: Round seven-country-pooled datafile version 6.0. Madrid, Spain & Vienna, Austria: JD Systems Institute & WVSA Secretariat.

Zurita, C., & Steinbach, S. (2026). Faith and fermentation: The impact of religious composition on global wine trade. Journal of Wine Economics, 1-17. doi:10.1017/jwe.2025.10113.