PARIS (Reuters) – The closure of bars and restaurants to contain the spread of the new coronavirus has slashed global wine sales and winemakers’ revenues in Europe could be cut in half, the International Organisation of Vine and Wine (OIV) said on Thursday.
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 penalised by U.S. 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 distribution had moved to retailers and online purchases but overall consumption was 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 was comparable to that seen at the end of World War II, he added.
Mediterranean countries would 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.
French Agriculture Minister Didier Guillaume said earlier on Thursday that French winemakers were 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. “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 euros ($34.4 billion) in 2019, a new record high, OIV said, with France leading the way with 9.8 billion euros exported.
On Monday, the European Union’s executive on Monday forecast that wine consumption in the bloc’s 27 countries would fall by 8% in the 2019/20 season compared to the average of the last five years.
(Reporting by Sybille de La Hamaide, adiditonal reporting by Gus Trompiz; editing by Philippa Fletcher)