Transcript: Climate change is coming for your Bordeaux
This is an audio transcript of the FT News Briefing podcast episode: ‘Climate change is coming for your Bordeaux‘Sonja HutsonGood morning from the Financial Times. Today is Friday, January 3rd and this is your FT News Briefing. China’s best-selling carmaker is nipping at Tesla’s heels. And another crypto boss faces criminal charges. Plus, climate change is saying goodbye French Bordeaux, hello fine Danish White? I’m Sonja Hutson. And here’s the news you need to start your day.[MUSIC PLAYING]The electric vehicle race is cranking up a gear. Tesla — the world’s top EV maker — said yesterday that its annual sales had dropped for the first time since 2011. That same day, Tesla’s Chinese rival, BYD, reported its best year ever. China is actually expected to sell more EVs and hybrids than gas vehicles for the first time in 2025. Tesla and other western carmakers, meanwhile, will have to compete with China’s cheaper offerings, not to mention a global slowdown in demand for battery-only powered cars.[MUSIC PLAYING]A crypto mogul had his long-awaited day in court yesterday. Do Kwon is the disgraced co-founder of the bankrupt crypto firm Terraform. He’d been the subject of an international manhunt since fleeing South Korea in 2022. But he finally reached US soil this week after being extradited from Montenegro. The FT’s Will Schmitt has been following this case. He joins me now. Hi, Will.Will SchmittHey, Sonja.Sonja HutsonSo what happened this week for Do Kwon?Will SchmittSo Do Kwon started this week in Montenegro, where he’d been held for over a year. He had been trying to leave that country after fleeing South Korea. Montenegro and authorities had been detaining him while the justice ministry decided whether to send him for extradition to the US or South Korea. Both governments wanted Do Kwon on their soil so they could try him for various charges. Initially, there were eight charges for commodities fraud, wire fraud, securities fraud. Unsealed this week in a new indictment was an additional count of money laundering — all related to Terraform Labs and various platforms, coins and procedures that that company, which was co-founded by Do Kwon back in 2018, had carried out over the last several years.Sonja HutsonYeah. So can you go into some more detail about what actually happened in this whole Terraform saga?Will SchmittSo back in 2022, Terraform Labs had launched this token called terra. Terra was what we call a stablecoin, which means it’s supposed to be pegged to the US dollar. And there was also a kind of a sister coin called luna. And at the time, terra was one of the biggest stablecoins in the world. However, it was not backed by real assets. And as a result, in May 2022, terra lost its peg, luna fell to zero, they both collapsed and wiped out over $40bn worth of value, leading to the eventual declaration of bankruptcy for Terraform Labs in January 2024.Sonja HutsonSo what are prosecutors alleging was Kwon’s involvement in all of that?Will SchmittGenerally speaking, the gist of it is that whether making statements on social media, on podcasts, to investors directly or to government regulators, Kwon either outright lied or misled any of those parties about a variety of how the tokens worked, how they were allegedly backed, how they were traded to, you know, keep that peg intact in an attempt to prop them up and to make them more palatable and more attractive to investors and to placate regulators.Sonja HutsonYou know, Kwon’s name making headlines again during this moment of crypto euphoria. It feels a little ironic, right? Like we’re in this place where bitcoin is doing really well. There’s all this optimism because Donald Trump has signalled that he’s more pro-crypto. Do you think the darker days of fraud and scandal are coming to an end? I mean, has crypto finally cleaned up its image?Will SchmittI guess how clean it is, is remaining to be seen, especially depending on how Do Kwon’s case proceeds over the next, you know, months, potentially years. But yeah, you’re right. This has been a moment, these last few months since the November elections of really highly renewed optimism for the crypto industry. But there are cases like Do Kwon’s ongoing case, you have Sam Bankman-Fried, who’s appealing his, you know, conviction in his prison sentence that are just these kind of welcome or unwelcome reminders, rather, for those in the crypto industry who thought that this was all yesteryear’s problems.Sonja HutsonWill Schmitt is the FT’s acting US capital markets correspondent. Thanks, Will.Will SchmittThanks, Sonja.[MUSIC PLAYING]Sonja HutsonGlobal trade is in the middle of a major upset. There are a few things going on, like geopolitical tensions between the US and China, conflict in the Middle East. Plus, all the tariff talk from President-elect Donald Trump. And that has shipowners rethinking their traditional routes. Instead of just stopping in China to pick up goods, they might have to stop at several ports in places like India or Vietnam. So they’re going for smaller ships. That is a major turnaround. Not long ago, the bulkiest carriers were the vessels of choice. Remember the Ever Given that got stuck in the Suez Canal during the pandemic? Now, flexibility seems to be the name of the game for shipowners, and that means downsizing.[MUSIC PLAYING]Climate change is shaking up the European wine industry. French and Italian grape growers are struggling to adapt to warmer and drier weather, which means that the Bordeauxs of the past probably won’t taste like the Bordeauxs of the future. But this has also opened up an opportunity for northern European countries to compete. I’m joined now by the FT’s Susannah Savage to explain. Hi, Susannah.Susannah SavageHi, Sonja.Sonja HutsonSo tell me about some of these Scandinavian wines. What does the industry look like there?Susannah SavageSo we’ve really seen a boom in Scandinavian wine over the last couple of decades, but particularly the last decade. The number of vineyards in Denmark, for example, has doubled. And this is mainly because of the climate is just changing and becoming more like it was in more southern parts of Europe, say, 40, 50 years ago. And also there’s a bit of an improvement in viticulture. There’s a development of hybrid varieties of grape which grow more easily in these types of terrains.Sonja HutsonAnd going down south now to France and Italy, how is the warmer weather there gonna impact the wine industry?Susannah SavageIt’s already having a massive impact because the weather has meant that grapes are ripening quicker and in hotter conditions, which it means that the wines are stronger, more alcoholic and often sweeter. And so generally it’s seen as a lower quality if it’s too strong, too sweet, if it’s ripened too quickly. This is a problem going forward, which is only going to get worse. So the University of Palermo has looked at this and found that in some, you know, particular regions of Spain, Italy and Greece — coastal and lowland regions where at the moment they grow grapes for wine — droughts and heatwaves could leave 90 per cent of these areas unsuitable for winemaking by the end of the century.Sonja HutsonWow. So what are these traditional wine producers doing to adapt to that?Susannah SavageThere are a few things that you can do to try and get around it. One of them would be changing the variety of grape. Another might be irrigating the land. Now, generally, grapes to make wine should grow on land that’s a little bit deprived of water, but that’s only up until a certain point, then it becomes detrimental. So quite controversially, some of the regions in Italy, in France and Spain have allowed irrigation. Or you can also plant so-called cover crops which compete with the vines for water and nutrients, which slows down the ripening of the fruits to prevent what I described about excessive alcohol and too much sugar.Sonja HutsonOK, so irrigation is controversial in the wine world. What about the rest of those strategies? Are they raising eyebrows, too?Susannah SavageYes, because they interfere with the notion of terroir, which is, you know, the interplay of soil and climate and the culture in that particular part of the world where those grapes are grown. And also with the legislation that’s developed around this. You know, appellation legislation whereby to be called champagne it has to be grown in the region of Champagne, etc. And so some winemakers, they’re really against the idea of changing these things. One person I spoke to said it was like a face with too much Botox. It might look nice from far away, but it loses its character and its interest when you get up close. Others say that these are absolutely necessary in order for these regions to continue to produce wine and, you know, for the business to survive.Sonja HutsonWhat do you think the European wine industry is gonna look like in the next few decades?Susannah SavageI think we’re going to see a huge growth in northern European wines from countries like England, but also increasingly from Scandinavia or Poland, the Baltics. And that’s gonna come into competition with the more traditional wine-growing regions. I also think, you know, these regions are going to have to work really hard to survive and to adapt and to persuade consumers to buy into that adaptation. So consumers are gonna have to get used to the idea that a burgundy grown in Burgundy won’t taste like they’re used to it tasting. And that will be the challenge. Can you convince them to buy into that idea? And will the brand still survive?Sonja HutsonSusannah Savage is the FT’s commodities correspondent. Thanks, Susannah.Susannah SavageThanks very much.[MUSIC PLAYING]Sonja HutsonYou can read more on all of these stories for free when you click the links in our show notes. This has been your daily FT News Briefing. Check back next week for the latest business news.The FT News Briefing is produced by Niamh Rowe, Fiona Symon, Marc Filippino, Kasia Broussalian and me, Sonja Hutson. Our engineer is Joseph Salcedo. We had help this week from Sam Giovinco, Breen Turner, David da Silva, Michael Lello, Peter Barber and Gavin Kallmann. Our executive producer is Topher Forhecz. Cheryl Brumley is the FT’s global head of audio. And our theme song is by Metaphor Music. More
