Winemakers (and investors) rejoice: Bordeaux is on its way to a classic year
Earlier this year, Australian winemaker Treasury Wine Estates, best known for its iconic Penfolds brand, announced that it’s getting into French wines. The line of fine wines, known as Maison de Grand Esprit, is a “global focus brand” that started its life in the U.S. – in other words, the company is taking French vintages seriously. Treasury Wine Estates has timed its interest in France well: after a long, dry, summer, industry authorities have said that the Bordeaux region is about to produce a “classic” vintage.
After trade issues weighed down performance, Treasury Wine Estate’s share price is up by 2% so far this year
SOURCE: Yahoo Finance
Olivier Bernard, a prominent French winemaker, described the conditions that led to the “great, classic” vintage from this year: “2018 was a vintage with two periods. A very wet period until the end of June, and a very dry after July. We can already tell you we have a great vintage.” He was speaking at a wine-tasting event organised by the Union des Grands Crus de Bordeaux.
Bordeaux is a “reference point” for the higher-end of the wine market: it has the magic combination of high-quality vineyards and large production. According to Bloomberg, Bordeaux accounted for “60% of trading on the London-based Liv-ex wine market by value” in the week to October 18. But, unlike many New World regions such as California and Australia, Bordeaux is at risk from unpredictable weather.
Winemakers are so confident in this year’s crop that they’re already comparing it to recent standout years. Bernard Audoy of the Chateau Cos Labory estate, said: “2016 is better than ’15, and ’18 will be better than ’16. We’re at the level of ’09 and ’10.”
Dominion holds Treasury Wine Estates in its Global Trends Luxury Fund.
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