Great news for fine wine lovers. The price of La Tache and Lafite has been slashed by up to 25%. The same savings apply to almost any top wine you can name and are available from a wide range of UK merchants including Berry Bros & Rudd, Farr Vintners and Bordeaux Index.
There’s just one catch. You have to pay in US dollars.
And therein lies the explanation. On January 2, 2022, a dollar would have bought you £0.75. On Monday 26th September, following a borrowing-heavy ‘mini budget, that was widely described as a ‘gamble’, the Daily Telegraph - usually a reliable supporter of the governing Conservative party - reported, “the pound fell against every single other currency in the world, from the Albanian lek to the Zambian kwacha."
Indeed, it plummeted to the point at which an American would briefly only have had to add three cents to their dollar when purchasing a pound. While huge intervention by the Bank of England has helped the currency 'bounce' back to £0.90, there are few observers who expect it to strengthen much further. Quite the reverse, as a flock of chickens bearing bad financial news all come home to roost.
Of course, similar things could be said about the Euro, which slid below parity with the dollar in the summer, one year after being worth $1.20. It is entirely conceivable that, one day, very soon, the dollar, euro and pound will all be worth precisely the same and it is not impossible that Sterling could quite possibly end up as the weakest of the three.
Currencies constantly rise and fall in relative value, of course, a fact of life that is happily exploited by traders, some of whom make enough money from their efforts never to have to worry too much about the cost of their bottle of Bordeaux or Burgundy.
Over the next 12 months, miracles may happen. The British government’s reckless wager on slashing taxes to reboot the economy may pay off and the pound might return to its former glory back. The US mid-terms could have an unpredictable impact on the dollar, and who’s to say what might happen if Vladimir Putin and/or President Xi fell under a bus? On the other hand, one could ask what impact might the new Italian government have on the European currency?
My crystal ball isn’t offering any clarity over any of these outcomes. All I know is what the financial pages tell me today. Which is that now’s a rotten time for a Brit to buy Ridge or Screaming Eagle, and a great one for an American to be splashing out on Rayas or Jacques Selosses in London - in bond - or on the shelf.
For bottles in the latter category, there’s more good news - again, for bearers of foreign currency. The British Chancellor, Kwasi Karteng, has just reversed his predecessor’s decision two years ago to scrap tax-free shopping for international tourists. So, once the UK government has introduced its ‘modern, digital, VAT-free shopping scheme’, anyone shipping their purchase out of the country, should be eligible for a refund of the 20% sales tax. Just as they were before Britain voted to leave the EU on June 23rd 2016.
When a pound would have cost an American buyer $1.32.