That is an audio transcript of the FT News Briefing podcast episode: ‘Climate change is coming for your Bordeaux‘
Sonja Hutson
Good morning from the Monetary Occasions. Right this moment is Friday, January third and that is your FT Information Briefing. China’s best-selling carmaker is nipping at Tesla’s heels. And one other crypto boss faces legal prices. Plus, local weather change is saying goodbye French Bordeaux, good day advantageous Danish White? I’m Sonja Hutson. And right here’s the information you could begin your day.
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The electrical car race is cranking up a gear. Tesla — the world’s prime EV maker — stated yesterday that its annual gross sales had dropped for the primary time since 2011. That very same day, Tesla’s Chinese language rival, BYD, reported its greatest 12 months ever. China is definitely anticipated to promote extra EVs and hybrids than gasoline automobiles for the primary time in 2025. Tesla and different western carmakers, in the meantime, must compete with China’s cheaper choices, to not point out a worldwide slowdown in demand for battery-only powered vehicles.
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A crypto mogul had his long-awaited day in courtroom yesterday. Do Kwon is the disgraced co-founder of the bankrupt crypto agency Terraform. He’d been the topic of a world manhunt since fleeing South Korea in 2022. However he lastly reached US soil this week after being extradited from Montenegro. The FT’s Will Schmitt has been following this case. He joins me now. Hello, Will.
Will Schmitt
Hey, Sonja.
Sonja Hutson
So what occurred this week for Do Kwon?
Will Schmitt
So Do Kwon began this week in Montenegro, the place he’d been held for over a 12 months. He had been attempting to go away that nation after fleeing South Korea. Montenegro and authorities had been detaining him whereas the justice ministry determined whether or not to ship him for extradition to the US or South Korea. Each governments wished Do Kwon on their soil so they may strive him for varied prices. Initially, there have been eight prices for commodities fraud, wire fraud, securities fraud. Unsealed this week in a brand new indictment was a further depend of cash laundering — all associated to Terraform Labs and varied platforms, cash and procedures that that firm, which was co-founded by Do Kwon again in 2018, had carried out over the past a number of years.
Sonja Hutson
Yeah. So are you able to go into some extra element about what really occurred on this entire Terraform saga?
Will Schmitt
So again in 2022, Terraform Labs had launched this token known as terra. Terra was what we name a stablecoin, which suggests it’s presupposed to be pegged to the US greenback. And there was additionally a type of a sister coin known as luna. And on the time, terra was one of many greatest stablecoins on the earth. Nevertheless, it was not backed by actual property. And because of this, in Could 2022, terra misplaced its peg, luna fell to zero, they each collapsed and worn out over $40bn price of worth, resulting in the eventual declaration of chapter for Terraform Labs in January 2024.
Sonja Hutson
So what are prosecutors alleging was Kwon’s involvement in all of that?
Will Schmitt
Usually talking, the gist of it’s that whether or not making statements on social media, on podcasts, to buyers immediately or to authorities regulators, Kwon both outright lied or misled any of these events about quite a lot of how the tokens labored, how they have been allegedly backed, how they have been traded to, you realize, maintain that peg intact in an try to prop them up and to make them extra palatable and extra engaging to buyers and to placate regulators.
Sonja Hutson
You recognize, Kwon’s identify making headlines once more throughout this second of crypto euphoria. It feels just a little ironic, proper? Like we’re on this place the place bitcoin is doing very well. There’s all this optimism as a result of Donald Trump has signalled that he’s extra pro-crypto. Do you assume the darker days of fraud and scandal are coming to an finish? I imply, has crypto lastly cleaned up its picture?
Will Schmitt
I suppose how clear it’s, is remaining to be seen, particularly relying on how Do Kwon’s case proceeds over the subsequent, you realize, months, probably years. However yeah, you’re proper. This has been a second, these previous few months because the November elections of actually extremely renewed optimism for the crypto business. However there are instances like Do Kwon’s ongoing case, you’ve got Sam Bankman-Fried, who’s interesting his, you realize, conviction in his jail sentence which can be simply these type of welcome or unwelcome reminders, reasonably, for these within the crypto business who thought that this was all yesteryear’s issues.
Sonja Hutson
Will Schmitt is the FT’s performing US capital markets correspondent. Thanks, Will.
Will Schmitt
Thanks, Sonja.
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Sonja Hutson
World commerce is in the midst of a serious upset. There are some things happening, like geopolitical tensions between the US and China, battle within the Center East. Plus, all of the tariff discuss from President-elect Donald Trump. And that has shipowners rethinking their conventional routes. As a substitute of simply stopping in China to choose up items, they may should cease at a number of ports in locations like India or Vietnam. So that they’re going for smaller ships. That could be a main turnaround. Not way back, the bulkiest carriers have been the vessels of alternative. Bear in mind the Ever Provided that received caught within the Suez Canal throughout the pandemic? Now, flexibility appears to be the secret for shipowners, and meaning downsizing.
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Local weather change is shaking up the European wine business. French and Italian grape growers are struggling to adapt to hotter and drier climate, which implies that the Bordeauxs of the previous in all probability received’t style just like the Bordeauxs of the longer term. However this has additionally opened up a chance for northern European international locations to compete. I’m joined now by the FT’s Susannah Savage to clarify. Hello, Susannah.
Susannah Savage
Hello, Sonja.
Sonja Hutson
So inform me about a few of these Scandinavian wines. What does the business seem like there?
Susannah Savage
So we’ve actually seen a growth in Scandinavian wine over the past couple of many years, however notably the final decade. The variety of vineyards in Denmark, for instance, has doubled. And that is primarily due to the local weather is simply altering and turning into extra prefer it was in additional southern components of Europe, say, 40, 50 years in the past. And likewise there’s a little bit of an enchancment in viticulture. There’s a growth of hybrid kinds of grape which develop extra simply in all these terrains.
Sonja Hutson
And taking place south now to France and Italy, how is the hotter climate there gonna affect the wine business?
Susannah Savage
It’s already having an enormous affect as a result of the climate has meant that grapes are ripening faster and in hotter situations, which it implies that the wines are stronger, extra alcoholic and sometimes sweeter. And so typically it’s seen as a decrease high quality if it’s too robust, too candy, if it’s ripened too shortly. It is a downside going ahead, which is simply going to worsen. So the College of Palermo has checked out this and located that in some, you realize, specific areas of Spain, Italy and Greece — coastal and lowland areas the place in the intervening time they develop grapes for wine — droughts and heatwaves may depart 90 per cent of those areas unsuitable for winemaking by the tip of the century.
Sonja Hutson
Wow. So what are these conventional wine producers doing to adapt to that?
Susannah Savage
There are some things that you are able to do to try to get round it. One among them could be altering the number of grape. One other is perhaps irrigating the land. Now, typically, grapes to make wine ought to develop on land that’s just a little bit disadvantaged of water, however that’s solely up till a sure level, then it turns into detrimental. So fairly controversially, among the areas in Italy, in France and Spain have allowed irrigation. Or you can too plant so-called cowl crops which compete with the vines for water and vitamins, which slows down the ripening of the fruits to stop what I described about extreme alcohol and an excessive amount of sugar.
Sonja Hutson
OK, so irrigation is controversial within the wine world. What about the remainder of these methods? Are they elevating eyebrows, too?
Susannah Savage
Sure, as a result of they intervene with the notion of terroir, which is, you realize, the interaction of soil and local weather and the tradition in that exact a part of the world the place these grapes are grown. And likewise with the laws that’s developed round this. You recognize, appellation laws whereby to be known as champagne it must be grown within the area of Champagne, and so on. And so some winemakers, they’re actually towards the concept of adjusting these items. One particular person I spoke to stated it was like a face with an excessive amount of Botox. It’d look good from distant, but it surely loses its character and its curiosity once you stand up shut. Others say that these are completely mandatory to ensure that these areas to proceed to provide wine and, you realize, for the enterprise to outlive.
Sonja Hutson
What do you assume the European wine business is gonna seem like within the subsequent few many years?
Susannah Savage
I believe we’re going to see an enormous development in northern European wines from international locations like England, but additionally more and more from Scandinavia or Poland, the Baltics. And that’s gonna come into competitors with the extra conventional wine-growing areas. I additionally assume, you realize, these areas are going to should work actually laborious to outlive and to adapt and to steer shoppers to purchase into that adaptation. So shoppers are gonna should get used to the concept a burgundy grown in Burgundy received’t style like they’re used to it tasting. And that would be the problem. Are you able to persuade them to purchase into that concept? And can the model nonetheless survive?
Sonja Hutson
Susannah Savage is the FT’s commodities correspondent. Thanks, Susannah.
Susannah Savage
Thanks very a lot.
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Sonja Hutson
You’ll be able to learn extra on all of those tales totally free once you click on the hyperlinks in our present notes. This has been your day by day FT Information Briefing. Verify again subsequent week for the newest enterprise information.
The FT Information Briefing is produced by Niamh Rowe, Fiona Symon, Marc Filippino, Kasia Broussalian and me, Sonja Hutson. Our engineer is Joseph Salcedo. We had assist this week from Sam Giovinco, Breen Turner, David da Silva, Michael Lello, Peter Barber and Gavin Kallmann. Our government producer is Topher Forhecz. Cheryl Brumley is the FT’s world head of audio. And our theme music is by Metaphor Music.
