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European wine revenues could be cut in half

Published:  24 April, 2020

European wine revenues could be cut in half as a result of Covid-19, according to the International Organisation of Vine and Wine (OIV). 

Although wine sales, which the ONS said had been slashed across the globe due to the pandemic, were likely to rise again once lockdowns are eased, the pandemic could bring “irreversible changes to the sector”, it warned in a webcast news conference yesterday.

“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 Pau Roca, director general, OIV.

“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,” he added.  

Although at this early stage the information and statistical data available were insufficient to provide an accurate forecast and anticipate the scenario of the vitivinicultural sector in the future, the OIV said it had “certain qualitative information at its disposal”. Feedback given by member states reflecting a “radical change or transfer between distribution channels”, with distribution having moved to retailers and online.  

“The expected overall balance is a decrease in consumption, a reduction in average prices, and therefore an overall decrease in total sales value, turnover, margins and finally profits of the wineries.”

With global profits from wine at record highs last year, Roca compared the shrinkage to that seen at the end of the Second World War. 

In terms of the Covid-19’s impact on exports, the OIV highlighted that “economies in recession are not a promising market to develop”, saying that during this pandemic, the largest consuming countries have been the most affected. 

“Trade flows may recover along with the economy, but some permanent changes could occur.”

In 2019, the global value of wine exports reached €31.8bn - a new record, according to the OIV.

With export sales worth €9.8bn, France continued to be the most important world exporter in terms of value.

In terms of volume, in 2019 the international trade of wine was mainly dominated by three European countries - Italy, Spain, and France. Combined, the trio exported 57.1mhl, accounting for 54% of the world market.