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EUROPE: Eurozone break-up offers good and bad for wine producers - observer

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Europe's wineries face a mixed fallout from a partial break-up of the eurozone, according to one expert.

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If Greece exits the euro, as several observers suspect it will, the subsequent currency devaluation could boost European exporters. “We may see a very sharp improvement in the ability of eurozone manufacturers to export their wines,” said Financial Times investment columnist John Authers.

Speaking at the London International Wine Fair Conference today (21 May), Authers said that, following a Greek exit, “the euro could initially strengthen, but long-term it will weaken”.

However, he suggested that the economic consequences of at least a partial break-up of the euro might outweigh currency gains for Europe's wineries. A Greek exit would plunge the eurozone into fresh recession, he said.

Consumer demand further afield would likely also be knocked. “I don't see bad news for the eurozone as being positive for emerging markets,” Authers said, adding that the US economy would also take a hit.

A the top end of the wine market, Authers said that more investors may see wine as a sanctuary from the vagaries of the stock market.


Sectors: Wine

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