First of all - HAPPY NEW YEAR! 🥂 (Is it too late to say that....I think I am ok just this once!)
Wishing all of my lovely readers a fun filled and prosperous 2025 ahead!!
Let's head straight to the announcements, as there is already a lot coming up and I would hate for anyone to miss out....so here we go....
UPCOMING EVENTS
1) The ARRIVAL of The Wine and Cheese Network in Sheffield - We are VERY CLOSE to being SOLD OUT here for Jan:
Bringing everything that is great about Sheffield and South Yorkshire (the people) together with my other two main loves - Wine & Cheese. Could there be a better, marry?
Happening the LAST Thursday of Every Month.
2) MANCHESTER / SALFORD - Are You Ready?
We are coming over to Manchester too - with the creation of The Manchester Wine Club:
A fun filled way of getting rid of those January Blues! Enjoy a wine tasting session at the ALL NEW Manchester Wine Club held in Kargo MKT at the Media City.
Look out for more events coming up, or head over to the WEBSITE for more information on future dates and booking options.
Okay, so I mentioned earlier, a Happy New Year.
🤔 Secondly, who knew there was Wine in Mexico?? Come on....own up....I bet you didn't....
And if you did, I know TWO big things that are true of Mexico that you may well not know:
1) I was married in Mexico!
2) Mexico is the oldest wine industry outside of Europe, founded way back in the 1530s! 🤯
Ironically, Spain brought winemaking to Mexico, with Hernan Cortes decreeing the requirement for all farmers to plant 10 grapevines a year for every slave on their estate AND then they took it away in the latter part of the 16th Century to 'protect the Spanish wine industry' with the King of Spain banning new vineyards....
Ok so Mexico had a wine scene and then it didn't, that's what you are telling me? Yes, correct BUT there is now an up and coming wine scene...
However, we won't get too ahead of ourselves here. Mexico currently uses less than 20% of its planted acres of vines for table wine. The majority are for table grapes, raisins and brandy production.
Source: Bonner Private Wine Partnership
The wine regions above indicate the key areas of Mexico wine production, however, the reality is that 85% of the production takes place in the Baja California region - over in the far west of the country, bordering the U.S.A.
Baja California
Over in the region, there are said to be around 57 wineries and whilst the first modern mainstay of winemaking is deemed to have been Santo Tomas, established in the late 19th century, the most dominant producer in today's era is La Cetto.
La Cetto was founded by immigrants from Trentino in Italy in 1928 - known for their exported Nebbiolo - has anyone tried it? I must get a bottle!
Other Regions
The Guadalupe Valley, which for those who know their North American geography in depth, will know that it is just south of the border town of Tijuana, holds the largest amount of new vineyard development in Mexico. The ambitions of many young vintners are held here alongside a wave of new establishments to embellish the region - such as wine museums and posh food establishments to compliment that of the glass.
The key to the majority of this growth on the West coast is largely similar to the preferential conditions further north in the US - the fog! The Pacific Ocean creates the fog and breezes which keep it cooler than it might well otherwise be, to ensure grape growth.
🪰 The global pest that is phylloxera is pacified by the fact that most vines are planted on sandy soils which is ideal for the likes of Cabernet Sauvignon to develop and excel. Additionally, as with most under developed wine countries, money from investment outside has started to flow into the country and international trends with biodynamic viticulture and terroir driven wines are to the benefit of the region.
As you can see from the picture above however, wine is also grown in other regions too and this is continuing to develop despite for example the sometimes excessively rainy regions like Guanajuato.
Wine development has done so well in fact in Mexico that in 2020, Don Leo Grand Reserva Cabernet Sauvignon won Gold in the International Cabernet competition (CIDC) and took the trophy for the world's best Cabernet! No mean feat!!
Mexico though as a nation, still consumes more beer, brandy and tequila than wine although this has drastically improved in wine consumption levels in the last decade and has seen as a result, large import levels from the likes of Chile, Europe, Australia and New Zealand.
Watch this space.... 👀
⚠️ TNWG HOT TIP ⚠️
If you haven't already tried Mexican wines - for those who would like to sample, you can now find the odd bottle in wine specialist retailers. Especially the likes of producers like La Cetto - so take a look - you will not be disappointed!
🗞️ LATEST DRINKS INDUSTRY ARTICLES 🗞️
TOP ARTICLE: UK's 50 Best Indies 2025: The Top 10
It's great to see the innovative culture that exists across the UK and with the announcement from Harper's of the UK's 50 Best Indies for 2025 being delivered by Youtube this week it was great to see all the wine indies in the 50 list. To name the Top 3 and give them an extra clap:
OTHER ARTICLES OF NOTE THIS WEEK:
📈 MARKETS IN BRIEF 📉
On the week (as at 10th January 12:00 LDN) changes:
EQUITIES: ⬇️ FTSE 100 down 0.02%; ⬆️ DAX up 0.37%; ⬆️ S&P 500 up 0.025%; ⬇️ Nikkei 225 down 1.1%; ⬆️ Dow Jones up 0.25%;
COMMODITIES: ⬆️ Brent Oil up 4.06% ; ⬆️ Crude Oil up 3.95% ; ⬆️ Gold up 0.73%; ⬆️Silver up 0.58%; ⬆️ Copper up 0.56%
BONDS (in yield terms): ⬇️ UK 2yrs lower 0.0135%; ⬆️ UK 10yrs higher 0.014%; ⬆️ German 10yrs higher 0.031%, ⬆️ US 2yrs higher 0.015%; ⬆️ US 10yrs higher 0.033%
It's been the first full week back in markets and it has certainly been 'trying' at best. The fears of the UK finance situation seem to be slightly exaggerated - not least because you can look at the deficit which is similar to that of the OBR's October expectations. The 'Truss debacle' is fuelling the fire somewhat and probably wrongfully in my view, but clearly the market and the UK public more generally are concerned over the debt sustainability.
The big thing to look out for is any spikes in UK inflation for me. If this happens, this not only means that it will cost the Treasury a lot of money but also for you and I as consumers in the UK, it will lead to more money struggles and the cost of living to rear its head once more.
Over the water, maybe Trump doesn't have it all his own way. The failing of being able to pass the funding plan shows that Trump may not have quite the support that everyone first thought. The tussles with Elon Musk are also becoming more and more noticeable. In markets, if we compare this situation to back in 2016 when Trump was first elected, it seems it's not following the same tune. The bond curve only seeing modest gains, yet in 2016 that was a reason for a 70bp move higher. Again, I think the key in the short term is to keep an eye on growth and inflation numbers to dictate plays from here. There is also internal shocks with the LA fires which have already caused large scale destruction and there are preliminary damage estimates out there to the sum of $50bn!
As a side note, recall that Trump will be sworn in on the 20th January (5pm UK time) and is expected to also deliver up to 25 executive orders in his first day in office.
Fine wine had a bad year! I don't think we can avoid saying that. It wasn't a successful year to be invested in wine on the year, but that being said, as we know, fine wine is not a short term strategy play. Whilst Trump 2.0 is a little bit of a mystery still in terms of impacts to the bigger picture (especially with tariffs potentially coming in 2025), the weather for Bordeaux and Burgundy in 2024 was far from ideal. This in a weird way, may actually pay dividends to the market - with a smaller quantity available, may end up being the blessing in disguise required for a pricing reset.
Recall that some Chateau pricing was already down around 25% for their 2022 releases and there are rumours that this may again fall once more in 2023 with a price reduction which could well entice the buyers to return. Especially as interest rates have been falling rather than rising at the back end of 2024.
Overall, the portfolio is little changed near term. No expansion of further longs in fine wine albeit if the 2023 prices are significantly reduced then I think this carries an interesting buy opportunity, so will look at adding further longs. I like the back end of the UK bond curve, given it has been pretty beat up and will look to marginally add small longs here over time, US equities still remain king despite their outperformance in 2024, so no near term profits to be locked in for now and I am happy to hold bits of gold. UK property - especially at this point in time with snow everywhere is not a great experience and if selling would hold on for spring where you can, which may well bring buyers to the fore too.
NEW 📚 DRINKS EDUCATION ZONE 📚
Did You Know......?
👉 In the wine trade we call ideal temperatures for serving Red and White Wines 'The 20-20 Factor'.
What is that? Well it is with regards to the ideal serving temperatures for your still wines. For still Red Wines, the belief is that you should serve it at room temperature. HOWEVER, in modern times that is actually a few degrees too warm. So you use the 20 minute rule and place your red wine in the fridge for 20 minutes to give you the ideal serving time.
With white wines, it is the opposite. You have your wine in the fridge, but your fridge temperature is too cold for the ideal serving temperature, so you take the bottle out of the fridge for 20 minutes before serving!
Hey presto - the 20-20 Rule!
Thanks for reading this week!
All the best for the start of the year and a prosperous 2025 to all!
Cheers
Andy aka The Northern Wine Guy
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