Frost in 2016 leaves the wine industry with major losses

Written by: Michelle Koh

The worst frost in 30 years hit Bordeaux and Burgundy this spring, on April 26. An estimated of 50% of the budding grapes in the region is said to had been wiped out. This is said to might have caused a total of €2 billion losses to the wine industry with wine production set to fall by about 350 million bottles. Some vineyards are resorting to fire, candles, and heaters to try to save the crops. What frost does to grapes is that it can kill the budding grape flowers which leads to under ripe flavours in the wine after harvest. This is due to the flowers being killed before it could have the chance to bloom, leaving the vine with small chances of ripe fruits by the end of summer. For investors, the first major impact would be the prices of wines from the regions due to low yield, causing a staggering rise in prices of the grapes. Quality vintage from this would make it a rarity that would bring the prices up higher than the years where harvest are plentiful. While this could possibly be an asset to investors, care should be taken before purchasing, to ensure that the producers are careful in selecting grapes that are without flaws of it being under ripe and spoiled flavours due to the frost. However, it is too early to tell now the quality of the vintage until at least September. For our clients, we would ensure that a thorough research is done before we advise on the purchases and investments. Feel free to speak to our knowledgeable consultants regarding wines of the region from different years that are showing good potential as an investment.