Sydney Royal Wine Show will be held in August.

Many key markets around the world will suffer as a result of the COVID-19 pandemic spreading around the globe.

Wine Intelligence has a network of experts in different key wine markets around the globe and many of those have shared their analysis and opinions of how consumers are behaving and what the pandemic means for the wine category for the remainder of 2020.

Emma Sciara of Wine Intelligence Australia said at this stage the most immediate impact was regarding wine tourism.

“The most noticeable element is that we have seen declining cellar door sales as the normal influx of Chinese tourists during Spring Festival failed to appear. So far the on-premise sales in Australia seem to be holding up.”

Meanwhile in the UK, Simon Lawson the General Manager of Casella Family Brands (Europe), said: “On the surface it feels like there isn’t much dramatic change. London’s Tube is still packed at rush hour, and hardly anyone seems to be wearing masks.

“We’re hearing from on-premise that bookings are down on normal for the time of year, and events businesses are getting particularly nervous as clients are deferring decisions until the last minute. The news seems to move so fast, it feels a lot easier to defer rather than decide.”

Linda Crisman, Regional Manager Western USA, Jackson Family Wines, said there were already issue for on-premise, with further impacts likely.

“Restaurants and bars are already feeling the impact as people are going out less,” Crisman said. “On the whole, the on-premise will take a much bigger hit. People are already eating out and going out to bars less. On the other hand, I could see this helping online ordering services like Drizly and Minibar and in food, Grubhub and, as people stay in more and order in more.

“I saw a post on Facebook recently that someone had shared about Postmates advertising a ‘no touch’ service or something to that degree to further allay any concerns.

“We’re yet to see event cancellations, but that could be just a matter of time. The big issue in a market like Las Vegas is that in addition to both domestic and international tourists, we rely heavily on delegates who attend the many large scale conferences here.”

Understandably in Italy, there are big impacts for on-premise, while retailers are seeing a boom in trade.

Pierpaolo Penco, Wine Intelligence Italy, said: “The first and most striking event was the assault on supermarkets by people filling their trolleys with pasta, sauces, mineral water and other goods for fear of being out of stock. The director of an important Italian wine & spirits group, who had recently spoken to the manager of a retail chain, confirmed to me how in recent weeks the points of sale of large retailers have made a turnover close to that of Christmas.

“For the tourism industry the crisis period started two weeks ago, with an average of 80 per cent of cancellations (especially of foreign tourists), which has led many hotels to close temporarily. More generally, the on-trade channel is now beginning to suffer, both due to the reduction of customers and as a result of government measures to discourage too close socialisation opportunities (in quarantined areas the on-trade premises must close the shutters at 6 pm).”

In terms of predictions for the wine category for the remainder of 2020, Penco added: “It will be the most difficult period since the methanol scandal in 1985. Our inbound tourism industry has done so well in the past few years that it has reversed the long term trend of consumption decline in the domestic market – we will have to wait a while for international tourist numbers to recover.

“I am sure that once the emergency is resolved, perhaps with the summer season, the domestic Italian consumer will resume their love story with the aperitifs and the various socialisation occasions.

“Until then, I foresee some difficulties for wine businesses, especially small ones, which have focused an important part of their sales on the cellar door, and have grown reliant on international tourists.”

Looking ahead in Australia, Sciara said: “The effects will last long after the virus has peaked – consumers will be spending more cautiously both domestically and in key export markets. The tourism business is still dealing with the after-effects of the fires, so it will be a while before we see a return to normal.

“From the export point of view we are hoping that some of the excess supply in China will be sold through towards the Mid-Autumn Festival period. Vintage forecasts from ABARES (national commodity forecaster) is predicting a below-average vintage size which will help offset the fall in demand.”

Lawson predicts a tough time ahead for the UK’s on-premise, saying: “So far the government is resisting imposing restrictions on the public, but this will change soon. We understand the medical experts are expecting the peak of infections in the UK in about 6-8 weeks’ time, at which point restrictions may start to be lifted.

“Supermarkets will do just fine, but it’s the on-premise, hotels and events companies which will have a hole in their revenues – somewhere around 15 per cent of their annual sales – which won’t be made up in this calendar year.

“We haven’t seen anything change yet from a retail sales perspective as yet, but we have already seen a drop off in Travel Retail (ferries, airports). Supply has been rather lumpy as shipping lines have had to adapt their schedules to China and Singapore port closures.

“Looking ahead I’d say that the [UK] On Trade is in for a tough time, clearly festival volumes are up in the air and in retail I’d expect local small stores to do well.”

For the US, the concern has been the government response, as Crisman explains: “The big unanswered question for Americans is how bit the outbreak will get. We are losing faith in the government response – it seems very slow and complacent, and who knows how many confirmed cases we will have when the virus testing gets to a sensible number [estimated at <3,000 tests completed as of 9 March].

“When events like Indian Wells [major tennis tournament in California] are cancelled, it feels like we are just seeing the tip of the iceberg.”

Andy Young

Andy joined Intermedia as Editor of The Shout in 2015, writing news on a daily basis and also writing features for National Liquor News. Now Managing Editor of both The Shout and Bars and Clubs.

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