Expensive wine and climate – Wine investors see prices rising and taste changing – Foodlog

A bit of wine investor will not turn his hand for a bottle of Château Le Pin, a classic Pomerol, which trades for more than €3,000. Pressured by the growing demand from rapidly enriching China and the limited supply, the price of the world’s most iconic wines is steadily rising. Just like other top wines from France, Italy and California that, because very few bottles are made, fetch hundreds to thousands of euros and dollars per bottle as they age.

Will the ongoing price hike hold up or will climate change throw a spanner in the works?

That’s the question most novice wine investors are asking, says Matthew O’Connell of wine trade Bordeaux Index in the Financial Times. “We notice, especially in conversations with new investors in the sector, that it’s in their top 5 or 10 questions.” That was not the case a few years ago. The question is justified because climate change will affect the cultivation of grapes, also the most well-known ‘certain values’.

Younger, more northerly and less expensive seems to be the future for those who care about taste. That does have a disadvantage for those who collect wine to invest in it, to show it off and to increase their capital

In recent years, winemakers around the world have been dealing with hotter and drier summers, resulting in higher alcohol percentages. But the weather is also becoming more extreme, with unpredictable rainfall and severe spring frosts. This year, France’s vineyards were hit by a severe frost in April, with the result that the country saw its wine yield plummet by a third. A heavy blow, but one that could push prices up further due to further scarcity.

Moisture stress is of a different caliber. During the ripening of the grapes, moisture deficiencies in the soil can manifest themselves clearly and unpleasantly in the taste. You don’t want to taste that in a wine for which you have paid hundreds or more euros or dollars. The real connoisseurs now know that precious Spanish, Southern French, North American and Italian suffer from such taste effects.

Another threat is the many wildfires, which hit, for example, Californian wine regions such as the Napa Valley. Not even because the vineyards themselves burn, but because the smoke particles affect the taste of the grapes. It’s called ‘Smoke taint’, and it has led several California winemakers to stop making their 2020 wines altogether – the taste would be off limits to their discerning and ‘expensive’ customers.

Winemakers are looking for a solution in new wine varieties, which are more resistant to drought and wetness, and in moving to other areas. The ‘wine border’ has now shifted far to the north and has Norway and Sweden. Also the British winegrowing flourishes, while the best wine tasters prefer the quality of the limited amount of sparkling wines from Luxembourg and Belgium to the real Champagne.

Perhaps the Chinese should learn to pay less attention to the name of a label and to abandon the idea that expensive wine from a well-known house is tasty. The new wine regions produce top wines that are delicious drunk younger. Because where the classic Bordeaux wines – bought as an investment – only show their true value after decades, the young generations are drinking it much earlier. Younger, more northerly and less expensive seems to be the future for those who care about taste. This does have a disadvantage for those who collect wine to invest in it, to show it off and to increase their capital.

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Expensive wine and climate – Wine investors see prices rising and taste changing – Foodlog

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