Climate Change News Drives Down Prices of High-End Wines

Recent research from the University of Auckland suggests that climate-related news can have a direct impact on how much people are willing to pay for wine, particularly high-end bottles from France. Dr. Gertjan Verdickt, a finance academic at the university, led a study examining the relationship between climate news and wine prices in international markets. His findings indicate that when there is an increase in climate-related news coverage, the price buyers are willing to pay for foreign wine drops noticeably.

Dr. Verdickt’s analysis shows that a one-standard-deviation increase in climate attention is associated with a 3.58 percent decrease in the price of a bottle of wine. For example, if a bottle is typically valued at $480, this would mean a reduction of about $17 when climate news spikes. The study focused on Bordeaux Premier Cru wines, which are among the most prestigious and expensive in the world. These wines are produced by five châteaus—Haut-Brion, Lafite Rothschild, Latour, Margaux, and Mouton Rothschild—and are frequently traded at auction houses globally.

To conduct his research, Dr. Verdickt collected data from over 68,000 Bordeaux Premier Cru wine auction prices across 222 auction houses in 18 countries. In total, more than 70,000 auction transactions were analyzed. He compared the prices of these wines abroad to their prices in France, using France as a benchmark. In theory, the price ratio should be one, meaning a bottle costs the same abroad as it does in France. When this ratio changed, Dr. Verdickt looked for explanations and found that increased attention to climate issues was a significant factor.

The study introduced the concept of “climate extrapolation,” where investors project local climate concerns onto assets from other regions. This means that even if French vineyards are not directly affected by local weather events elsewhere, negative climate news can still influence how much buyers in those regions are willing to pay for French wine.

Dr. Verdickt also developed a “Climate Attention Index” to measure how much attention each country’s media gave to climate change. This index was created by analyzing over 23 million tweets from major national newspapers and comparing them to authoritative climate change texts. The result was a daily score for each country reflecting its level of climate news coverage.

The effect of climate news on wine prices was most pronounced during summer months when the impacts of climate change—such as heatwaves or poor air quality—are more noticeable. Dr. Verdickt ruled out other possible explanations for price changes, including natural disasters, general economic uncertainty, investor mood, and differences in bottle condition.

The findings have implications for both wine collectors and investment fund managers who treat fine wine as an asset class. As personal experiences and media coverage around climate change grow more intense, they can influence not only consumer behavior but also financial decisions related to luxury goods like fine wine.

This research adds to a growing body of evidence showing that personal experiences and perceptions can shape financial decision-making. Previous studies have found similar effects on corporate voting and other investment choices when people are exposed to significant news events or environmental changes.

Dr. Verdickt’s work highlights how global concerns about climate change are now reaching into markets that might seem far removed from environmental issues. For those involved in buying or investing in fine wine, staying aware of public sentiment around climate change may become increasingly important as it continues to affect market values worldwide.