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British vineyards hit by Covid crisis

Published:  02 June, 2020

The Covid-19 outbreak is causing serious damage to the UK’s wine industry, according to a survey of its members commissioned by Wines of Great Britain.

Three-quarters of vineyards expect a significant fall in turnover as a result of the crisis, with none expecting turnover to rise. On average, British winemakers expect their revenues to be slashed by 52%.

Two-thirds of vineyard owners are already experiencing cash-flow problems, and of these, 62% have either used personal savings or retained earnings in the business to keep afloat. Stress levels have risen by 40%.

Vineyards have taken a range of crisis measures to try to save their businesses, with 47% halting strategic investments, 33% seeking to delay payments, 30% cutting prices and 20% cutting wine production.

In terms of disruption, 32% are already reporting significant delays and obstruction in the supply chain, with 4% halting the supply chain altogether. Only 21% have experienced no problems yet.

Looking ahead to the harvest, 40% of vineyard owners are concerned or very concerned about the availability of seasonal workers, a figure that rises to 52% among the larger vineyards. A quarter of larger producers are also worried about tank and bottle-storage capacity.

Among vineyards and wineries that employ workers, half have furloughed staff through the government’s coronavirus job retention scheme. However, a quarter have already made people redundant.

The UK’s winemakers are largely unimpressed with the government’s support overall, with only 24% regarding the government as being helpful. Some 28% have taken advantage of the small business grant scheme and 24% have deferred VAT payments by three months. But only 11% have received coronavirus busines interruption loans.

Simon Robinson, chairman of Wines of Great Britain, said: “As with many other sectors, our industry has been badly hit by the downturn in sales, particularly with hospitality in complete lockdown and our vineyards also being closed to the public.

“Although this crisis has had a significant impact on our fledgling industry, we nevertheless remain very optimistic about the medium- to long-term future.”

On a positive note, the survey found that among the two-thirds of wineries that had an online presence, online sales had increased by an average of 25% through the crisis.

Wines of Great Britain has launched a range of initiatives through the crisis to help British winemakers, including driving internet sales.

The survey was conducted on behalf of Wines of Great Britain by Professor Francis Greene and Dr Alessandro Rosiello of the University of Edinburgh Business School. Research took place during late April and early May and involved 92 vineyards across England and Wales.

The full report is available online here.