Coronavirus: global wine sales plummet due to pandemic

Text by: Agnieszka Kumor

The global wine trade has been hit hard by the Covid-19. Italy, Spain and France, which together export more than half of the wine produced on the planet, have seen their sales plummet due to the closure of cafes, hotels and restaurants.

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In the Bordeaux region, this 2019 vintage is sometimes compared to that of 1929, a vintage of the century! Beyond this somewhat mercantile comparison, the question arises: will this superb wine, by its structure and harmony, have a bitter taste because of the pandemic?

A sharp drop in sales

According to data from the International Organization of Vine and Wine ( OIV ), the viticultural planet produced 260 million hectoliters of wine last year, a drop of 12% compared to 2018. Italy, France and Spain represent half of the world wine production. These three countries also export the most. But because of the containment measures implemented around the world to stem the spread of the Covid-19, they saw their sales plummet. The closure of cafes, bars, restaurants and hotels has led to a sharp drop in consumption, linked in addition to the radical suppression of the tourist industry. “  It is estimated that in Europe, the closure of this distribution channel could lead to a 35% reduction in sales volume. And that could reach more than 50% loss in terms of sales value  , ”said Pau Roca, director general of the OIV, in an interview with RFI.

On the other hand, we are seeing an increase in sales in mass distribution, namely in supermarkets or neighborhood grocery stores. Sales intended for domestic consumption. Would the Covid-19 have changed consumption patterns? Not so fast. “  This consumption does not compensate for losses from the CHR circuits [note: cafes-hotels-restaurants]. The customer has less choice, some brands are represented, but not others. Large retailers also exert greater pressure on the price, the producer earns less margins  ”, indicates the director general of the OIV.

With that, online sales have increased slightly, too. Bottles ordered directly from a producer or on platforms dedicated to the wine trade, but which to arrive at a consumer (or at least at his door) need well-established logistics, including deliverers. From this point of view, "  demand by internet has proven to be stronger than the logistical possibilities ready to satisfy it,  " he notes.

10 million hectoliters of unsold goods in Europe

After the increase in customs taxes on French wines (but also Spanish and German), taxes imposed by Donald Trump in retaliation for subsidies to Airbus, the pandemic is suffocating producers. The stock of unsold French wines is estimated at three million hectoliters. With Spanish and Italian wines, more than 10 million hectoliters in Europe could be distilled before the end of summer. Among these unsold items, there are also high-end wines. The French, Italian and Spanish wine cooperatives have asked Brussels to provide for a storage measure for these wines, the marketing of which may be postponed without weighing on the markets.

Climate change and biodiversity at the heart of the reflection

Viticulture will come out, sigh the winemakers. As she has done whenever she has been threatened by a crisis. But the overwhelming experience of this new coronavirus urgently raises questions about climate change and the imbalance of biodiversity. “  Economically, the Second World War cost the winegrowers the abandonment of three years of work. With regard to the Covid-19 crisis, the World Bank puts forward figures comparable to the post-war situation. All sectors of the economy will no doubt need a new Marshall Plan before they can restart. Support from the governments for the wine sector will be equally essential,  ”concludes Pau Roca.

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