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What Donald Trump means for the fine wine market

15th November 2016


Whether your reaction is one of downright despair, tentative curiosity or outright glee, one thing is clear: Donald Trump has won the US presidential election with resounding success.

As a keen businessman with a family winery, what will his presidency mean for the global fine wine market?

Wine collectors hold their breaths

For the second time this year, buyers and sellers of fine wine are holding their breaths in anticipation following a starkly satirical round of political ‘lucky dip’ in one of the world’s leading nations.

Dubbed ‘America’s Brexit’, Trump’s victory has left the US, not to mention the rest of the world, in a state of genuine surprise, whether pleasant or otherwise.

Trump’s win caused the expected initial volatility in global stock markets, and the Dollar recoiled before regaining some strength following the President’s winning speech in the early hours of 9th November.

In Trump’s first speech as President of the USA, he promised to be a “president for all Americans” and to invest in infrastructure and the business sector.

The impact on UK fine wine

Stability within the US market is crucial to the health of the British fine wine business, especially in the current climate.

After Brexit, Dollar buyers scrambled to take advantage of low UK prices caused by a weak Sterling, and this extra activity has been fuelling the recovery of the fine wine market in general so far this year.

Any extra caution among US buyers may not help sustain continued growth. However it’s still early days, and trading has so far been calm following Trump’s win – unlike the flurry of activity seen on Liv-ex after Brexit.

“We haven’t seen anything unusual yet – there’s been no impact at all. Business as usual,’ said Anthony Maxwell, Liv-ex’s head of exchange.

However, it is also possible that more investors will turn to alternative assets like fine wine if stock market volatility continues. For example, the price of gold rose 4% overnight in the wake of Trump’s victory.

“Safe havens are well bid, especially the Japanese Yen alongside fixed income and gold,” remarked Ranko Berich, head of market analysis at Monex Europe.

Free vintage wine trade put on hold

While Obama was a keen supporter, both Trump and Clinton opposed the EU-U.S. Transatlantic Trade and Investment Partnership (TTIP) deal, which proposed free trade between the two continents.

Each year, around $3.7 billion worth of wine is exported from the EU to the US – six times more than the amount travelling in the opposite direction.

Commenting on recent talks concerning wine trade names, Dr Ignacio Sánchez Recarte, secretary general of Europe’s wine trade body (CEEV) said –

“We acknowledge that no progress has been achieved during the last round of negotiations and that the actual political climate in both sizes of the Atlantic renders difficult, in fact almost impossible, any substantial development in the close future.”

Fine wine workers face uncertainty

As happened with Brexit, foreign workers are bound to be going through a period of both economic and existential uncertainty. The US food and wine sector relies heavily on immigrant labour, especially at harvest time.

However, it remains to be seen how many of Trump’s grandiose plans to cut immigration will come to fruition in the cold light of day – indeed, how many of Trump’s grandiose plans, full stop.

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