One Year Later: Coronavirus and the Global Wine Industry
Erin O'Reilly - Certified Specialist of Wine
The wine industry is just now publishing their annual wine production and sales reports for 2020. Retrospectives with asterisks. International producers faced different hurdles to move their wines to market under pandemic conditions, often facing strict government regulations and shifting policies as the scientific community learned more about COVID-19. Here’s a quick look at the pandemic’s impact on several major wine regions.
Pour Me a Glass.
US wine imports were up 14.33% from 2019 to 2020. At-home wine consumption ballooned over the past year, with direct to consumer sales (wineries selling directly to the customer) up over 66% in the United States.
We are enjoying more mid-week wine with dinner than ever before, but even with this seemingly good news, the drop in global wine demand touched wine producers large and small.
The effect of coronavirus on a country’s wine industry has depended on lockdown lengths, lockdown policies, and the drinking habits of the local population. How has the coronavirus impacted the wine industry?
Let’s take a look at a few of the major wine producing countries.
COVID-19 and Global Wine Production.
South Africa.
Perhaps hardest hit by the pandemic has been South Africa. Your local restrictions will likely seem minor compared to those adopted in the country, which has for the second time placed restrictions on producers with a total ban on the sale of alcohol. South Africa’s government has used the pandemic to crack down on a larger social issue of alcohol abuse aimed mainly at beer producers, but affecting all alcohol manufacturing businesses. Ostensibly, the logic behind the ban being that medical personnel and facilities are under stress and alcohol-related trauma, like drunk driving accidents, will be burdensome for a strained healthcare system.
During the first shutdown early in the pandemic, this included closing wine production facilities, meaning delays in last year’s harvest because producers were prohibited from bottling and shipping the wines currently in wineries. These shutdowns will have a ripple effect on South Africa’s wine industry as producers go into 2021 with their 2020 wines still in storage.
Italy.
Moving north to a land famed for regional wines married with traditional dishes, Italy’s wine market relies heavily on the tourism and restaurant industries. Producers can sell up to 90% of their wines through restaurant distribution channels domestically and internationally, and with restaurants shuttered, the economic toll has been particularly hard. Quality producers that built world-class reputations by targeting coveted wine list placements at the finest restaurants continue to face exponential decreases in sales.
Some regional Italian producers made the decision to cut production in fall 2020 or to distill their lowest quality wines for use in sanitizer to help alleviate what has quickly become a surplus wine inventory.
France.
A country renowned for its wine production, France is one more on the list of countries affected by the pandemic. However, France’s wine industry figures for last year are complicated by Brexit and a new 25% tariff on EU wine exports to the US.
One category of wine production unquestionably hit by COVID-19 has been French Champagne, which finished off 2020 with sales down 18%. Sparkling wines are symbols of celebration, momentous life events, and merry company. The past year saw few reasons to pop open a celebratory bottle of bubbly surrounded by friends and family.
Australia.
Australia’s wine industry has fared relatively well with COVID-19. Domestic consumers continued to quaff value/commercial wines at home, and the Australian bulk wine market was strong globally with exports to China. New Chinese tariffs on Australian wines will bring different hurdles to the Australian wine industry in 2021, but challenges unrelated to the pandemic are a welcome change in industry headlines.
Vinous Escapism.
In the before-times, a bottle from France, Chile, New Zealand or South Africa arrived on our dinner tables thanks to an intricate global wine industry that was largely transparent to the average consumer. One year into the pandemic, we have a much clearer understanding of the complicated and layered economics of different overseas wine regions, and an opportunity to support them as they recover from the pandemic.
COVID-19 continues to stymie our travel plans, but it doesn’t mean you can’t indulge in a little armchair tourism. Check out our International Wine Club, offering imported wines directly from small wineries, and see what the wine world can deliver to your door!
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Author Bio: Erin O’Reilly is a Certified Specialist of Wine with the Society of Wine Educators and a long-time lover of all things fermented grape. She pens her work from Monterey wine country where she raises a glass to the growers and producers crafting wines that transcend time.