Corona virus can halve wine sales in Europe

Closing bars and restaurants to curb the spread of the new corona virus will reduce global wine sales and halve the income of European wine growers, according to the International Organization of Viticulture and Wine (OIV).

Although wine sales are likely to increase again after the blockade is removed, the crisis can cause irreversible changes in the industry.

European producers, especially in France, Italy and Spain, are in dire need of assistance, with French wine producers being punished with 25% US tariffs as part of Washington’s response to EU subsidies and blockages.

“In Europe, stopping this important sales channel can result in a 35% volume reduction and a 50% reduction in sales,” Paul Powers, CEO of OIV, told an online press conference without specifying a time period.

Total consumption

According to Roca, sales have shifted to retailers and online purchases, but overall consumption is expected to decline along with prices, which will have an impact on wine maker sales and profitability.

With world wine income at a record high last year, the decline in the sector was comparable to at the end of World War II, he added.

Mediterranean countries will be most affected, because they depend heavily on bars, restaurants and terraces and tourism will remain limited even after the blocking measures are lifted.

“At this point, everyone agrees that the blockade has destroyed, maybe it cannot be changed, unless extraordinary public funds have been provided for reconstruction,” said Roca, whose organization brings together governments from 47 wine nations.

The wine maker is choking

French Agriculture Minister Didier Guillaume said French wine producers were suffocating and asked for more support from the EU.

“For example, when some countries begin to reopen their ports, China does, but the scenario does not provide much room for optimism in the near future,” he told the LCI news channel.

The two biggest markets in the world, Europe and the United States, could reduce their imports, he said. “Trade flows can recover with the economy, but there can be some permanent changes.”

The international wine trade – the global value of wine exports – surpassed $ 31.8 billion ($ 34.4 billion) in 2019, a new record, said OIV, with France leading with exports of € 9.8 billion exported.

Previously, the executive branch of the European Union had predicted that wine consumption in 27 countries in the block would decrease by 8% in the 2019/20 season compared to the average of the last five years.