Just a quick thought on the implications of recent falls in sterling against the dollar (see graph). The situation as against sterling at the beginning of the year was a strong euro and a relatively weak dollar. One of the effects seen by the London on-trade was that, coupled with the additional pinch of April's duty rises, a significant number of bars and restaurants de-listed their French and Spanish house wines in favour of suppliers from the US and other nations who sell in dollars (such as Chile).The dollar hit a 7-month high last Friday, apparently due to a combination of downbeat UK and Eurozone forecasts and falling commodities prices. I don't have an answer to this, but I wonder if a recovering dollar (and relatively weak euro) will by the end of the year prompt a switch back to old world house wines. And if so, if that will be an early indicator of tough times ahead for New World dollar-driven exports into Europe.
