Deadly flash floods in Spain
As you must have seen in your news feeds, eastern and southern Spain is experiencing its worst flooding disaster in generations. This comes on the heels of an extraordinarily dry summer in eastern Spain which forced water rationing and resulted in up to 80% crop loss for grape farmers. In cases of drought, soils often hardpan, making them less absorbent. So on 29 October when some areas of eastern Spain experienced a year’s worth of rainfall in less than eight hours, the region was ill-prepared to receive it.
According to the latest from AP News the subsequent flash floods have killed at least 205 people: 202 in the region of Valencia, two in Castilla-La Mancha and one in Andalusia. When I contacted our Spanish specialist, Ferran Centelles, to see if he had heard from growers in the affected areas his message back read, ‘some trellises have fallen, damaging the vineyards, and there have been some severe landslides, but nothing compares to the loss of human lives … Many people are still cut off, and there are many missing.’
UK autumn Budget's far-reaching impacts
Clearly, I am an American – which means I’m preoccupied by the potential demise of our political system on 5 November … but I took a break from American politics yesterday to follow the reports of the wreckage that the UK autumn Budget – announced on 30 October – has inflicted on the drinks trade.
First, a bit of background … In August of 2023, the largest single alcohol tax hike in nearly 50 years, pushed through by the UK Conservative party, came into effect. They also came up with a ridiculously complex incremental duty escalator that will increase duty according to alcohol percentage and which will go into effect in February 2025. As a result of the duty rise, retailers have had to raise prices in a market that’s seeing flagging demand. Fairly predictably, alcohol sales have gone down. And as a result, the UK government’s alcohol duty receipts dropped £1.3 billion in the year after the duty hike.
In July, the UK went from a Conservative government to a Labour government.
The economy is in rough shape. Duty hikes were expected, but as last year illustrated, hiking duty on a struggling product is not likely to result in increased revenues for anyone and, because of that, the UK drinks trade was sincerely hoping for a duty freeze. Instead, duty went up 2.7% on non-draught products – affecting UK retailers.
Meanwhile, duty was cut by 1.7% on draught products served in hospitality venues, which is cold comfort because the minimum wage has been increased – raising employment costs – and business relief rates which were put in place to help struggling businesses have been decreased for both hospitality and retail sectors.
But perhaps the worst news is regarding inheritance taxes and agriculture. For years the UK has had what’s called APR, or Agricultural Property Relief, which waives inheritance tax on the transfer of ‘agricultural property’. On 30 October it was announced that this was changing and that there will now be a £1 million inheritance tax relief cap after which inheritance tax will apply with 50% relief. Inheritance tax is generally 40% in the UK; with 50% relief it is still 20%. So, if you pass a £2-million farm to your child, they are required to pay the government £200,000 on the £1 million above threshold.
In theory, this may sound fair but consider that farming is a land-rich, cash-poor endeavour. Returns aren’t great at the best of times. Without the cash to pay the inheritance tax, farmers will be forced to sell pieces of their land in order to pay. There is a real fear right now that it won’t be individuals buying that land – it will be large-scale agribusiness.
Smallest harvest in Germany since 2017
The German Wine Institute (DWI) reported on 24 October that harvest volumes are expected to be 10% below the 10-year average, the lowest volumes since 2017. Much of this shortfall is due to frosts in April of this year that damaged buds and resulted in loss of yields. However, the Rheingau and Pfalz saw less damage and are down only 1% and 4% respectively, and the Rheinhessen is actually up 7%.
New wine regions recognised in the US and France
On 28 October the TTB filed its approval for Washington State’s 21st AVA: Beverly, Washington. The new AVA borders the south-west corner of the Royal Slope AVA within the larger Columbia Valley AVA. Beverly, Washington is the second-smallest AVA in the state and covers 2,415 acres (977 ha) of which 400 are planted (162 ha), ranges in elevation from 515 to 950 ft (157–290 m), has higher average growing-season temperatures and higher average wind speeds than surrounding areas, and has mostly sand and gravel soils. The main varieties grown are Cabernet Sauvignon, Merlot, Malbec and Cabernet Franc.
The author of the proposal, Kevin Pogue, is a geology professor who specialises in wine [in fact he authored the Washington entry in the 5th edition of the Oxford Companion to Wine] and was hired by growers in the area to write the petition. Four Feathers Wine Services currently owns the vast majority of commercial vineyards within the new AVA. The company’s director of vineyard operations, Tom Merkle, also independently owns a few vineyards in the area. Fruit is sold to multiple brands within Washington State.
France has also added a new wine region to its roster – a PGI (Protected Geographic Indication, also called IGP in French) named Lorraine. The new IGP borders Germany, Luxembourg and Belgium and overlaps the AOPs Moselle and Côtes de Toul and the IGP Côtes de Meuse. The new regulations state that this IGP is available to white, rosé or red traditional-method sparkling wines that spend a minimum of nine months on their lees, contain no more than 30% Riesling, and are 10–13% alcohol. There are 17 grape varieties allowed including a handful of hybrids. This region has been making traditional-method sparkling wines since the 1870s and is not so far from Champagne but has never received the same recognition. The hope is that the new appellation allows producers in the area to expand the audience for their wines.
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