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OIV Says COVID-19 Crisis May Cut Wine Sales In Europe By Half

Published on Apr 25 2020 5:50 AM

OIV Says COVID-19 Crisis May Cut Wine Sales In Europe By Half

The closure of bars and restaurants to contain the spread of COVID-19 has slashed global wine sales, and winemakers' revenues in Europe could be cut in half, the International Organisation of Vine and Wine (OIV) has said.

While wine sales are likely to grow again once lockdowns are eased, the crisis could bring irreversible changes to the sector.

European producers, particularly in France, Italy, and Spain, have called for urgent help, with French winemakers being penalised by US tariffs of 25% as part of Washington's response to EU aircraft subsidies, as well as the lockdowns.

"In Europe, the shutdown of this important channel of distribution might bring a reduction of 35% in volume and a reduction of almost 50% in sales," OIV director general Pau Roca told a webcast news conference, without giving a timeframe.

Roca said that distribution has moved to retailers and online purchases, but overall consumption is expected to drop, along with prices, hitting winemakers' turnover and profitability.

With global profits from wine at record highs last year, the shrinkage in the sector is comparable to that seen at the end of World War II, he added.

Mediterranean countries will be most affected as they rely heavily on bars, restaurants and terraces, and tourism will remain limited even after lockdown measures are lifted.

"At this moment everybody agrees that the lockdown has had a destructive effect, probably irreversible unless exceptional public resources for reconstruction are put forward," said Roca, whose organisation groups the governments of 47 wine-producing countries.

More Help Needed

French agriculture minister Didier Guillaume said on Thursday 23 April that French winemakers are stifled, and called for more help from the EU.

"While certain countries are starting to reopen their harbours, it is the case for China for example, for the near future the scenario does not leave much space for optimism," he said on LCI news channel.

The two largest markets in the world, Europe and the United States, could reduce their imports, he said, and stated, "Trade flows may recover with the economy, but some permanent changes may occur."

The international wine trade - the global value of wine exports - topped €31.8 billion in 2019, a new record high, OIV said, with France leading the way with €9.8 billion exported.

On Monday 20 April, the European Union's executive forecast that wine consumption in the bloc's 27 countries will fall by 8% in the 2019/20 season compared to the average of the last five years.

News by Reuters, edited by Donna Ahern Checkout. Click subscribe to sign up for the Checkout print edition.

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