French Weather And Weak Pound Hit Wine Prices

Wine drinkers in the UK may be about to see the effects of severe weather in France and a lower pound following the EU referendum vote.

Damage in key French wine-making regions during the spring could lead to an 8% decline in national output this year, according to the French Agriculture Ministry.

This includes a 32% drop in the Champagne region, which - along with Burgundy and the Loire Valley - was hit by the frost.

Charentes and Burgundy-Beaujolais were hit by hailstorms.

The ministry expects declines of 23% in Burgundy-Beaujolais and 32% in Val-de-Loire. Bordeaux wine escaped the worst of the weather and its output is expected to be stable.

Adam Bruntlett is a wine buyer for Berry Bros & Rudd in London and has been watching what he described as "disastrous" weather in Chablis, Burgundy.

He said the region's frost and two hailstorms came during the important early stages of vine development.

After that came cold and wet weather, stopping the vines from recovering and he said there is talk of mildew causing more damage to vines that had survived the initial onslaught, with losses estimated at between 60 and 100%.

He told Sky News: "Based on this poor outlook for the 2016 vintage, the prices we have received so far for last year's 2015 wines have risen by 10 to 15%.

"This, added to the 10% fall in Sterling against the Euro post-Brexit, will make the 2015s around 25% more expensive than the 2014 vintage."

Mr Bruntlett expects demand for Chablis to fall in price-sensitive sectors, such as "by the glass" listings in restaurants and in supermarket own-labels, while customers of the fine wine market may even skip this vintage.

Will Hargrove, associate director and head of fine wine at London-based Corney & Barrow, said winemakers in Italy, Spain and increasingly the US had previously been the winners when their French wine regions suffered.

He told Sky News that pricing was "of course, a concern", adding that the top-end estates are usually prepared for bad weather but it can "have a more lasting effect" on those in the lower to mid-range markets.

And, at the lower end of the market, price points - for example £5.49, £7.49 and £9.99 - will be more difficult to maintain, especially with a weaker British Pound.

Tim Sykes, head of buying at Hertfordshire-based The Wine Society, was still optimistic that wine prices "will be largely unaffected" by the weather, but added that the weakening of the pound would "have a bigger impact on prices".

He told Sky News: "This devaluation of Sterling not only affects prices of wines purchased in Euros, but also wines bought in US, Aussie and NZ Dollars as the Pound has weakened against all these currencies since the referendum."