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Posted: Saturday, 21 March 2020 00:28

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Italian Wineries facing Covid-19 with Bravado

March 21: Italy has been the first European country to be gripped with coronavirus and affected the most in the ongoing battle with Corona Virus but the food and wine companies have been fighting hard to adjust and survive, writes Michele Shah from Tuscany who feels that Italy will rebound as it has from the previous calamities before

Food and wine exports from Italy equal about 50% of its total production, representing €44 bn exports, of which wine constitutes €6.4bn. It had to deal with defending its food industry from defamatory remarks about virus-free food and wine. Some producers were even requested to issue ‘corona virus-free’ certification for the export of its produce! Fortunately the EU and Italian officials were quick to counter-attack with an official statement and penalty for those instigating and requesting such documentation.

Italian wines are Virus-free

Riccardo Cotarella president of the Assoenologist Association has reiterated that it was impossible for the virus to survive in wine, as the combination of alcohol, the hypotonic environment and polyphenols, prevented the virus from living and multiplying.  He also commented that contamination of packaging was practically non-existent, considering the short life span of the virus and the absence of a potential “biological” living host.

Francesco Ricasoli, CEO and owner of Castello di Brolio winery in Chianti Classico, Tuscany says that unity and empathy seem to prevail fortunately. He has experienced no discrimination. Brolio continues to ship its products all over the world. In fact, there is a strong empathy for Italian wine and the world is starting to realize that COVID-19 is a global health problem and Italy is not the only wine producing country to be affected, so why discriminate.

Difficult times

So what is the Italian wine industry doing to prevent the wine sector form falling into an economic slump? “The risk is global recession which has already started,” says Ricasoli. “Wine tourism, especially important to Tuscany is already completely blocked and what is lost is lost forever and not recoverable. The economic and financial consequences will bring some companies to their knees.”

According to Giancarlo Moretti Poelgato, President of Villa Sandi, premium Prosecco doc/g producers in the hills of Conegliano Valdobbiadene, “The situation is difficult and changes rapidly, we are trying to think positively to return slowly to normal.” He had great expectations for tourism this year, as a new UNESCO World Cultural Heritage destination, but all those who booked to come to the beautiful hills here have cancelled. Villa Sandi is looking at different ways of re-modelling part of their commercial activities by promoting on-line virtual tours of the winery and the Villa but admits they cannot replace the real experience.

Most producers are offering commercial support to their customers with promotional activities to assist each customer individually. Bortolomiol Prosecco Superiore doc/g producers in Valdobbiadene will continue to supply customers where possible and are implementing where necessary flexible deadlines for payments.

Wine Tourism affected

Innocente Nardi, President of the Consortium Conegliano Valdobbiadene Prosecco Superiore DOCG assures that a regular flow of Prosecco Superiore is being shipped off to shores further afield. While individual wineries are still shipping out pallets of Prosecco, the Consortium has strengthened its activities by organizing social campaigns and webinars to meet individual market needs and objectives. With almost 400,000 visitors every year Conegliano Valdobbiadene wineries have implemented various strategies to connect with their aficionados including shipping wines to customers though e-commerce and bringing customers up to date with their news through interactive websites.

Active social media

Interactivity has spread fast though Italy’s social network with tweets, Facebook posts and Instagram photos to show how the Italy is counteracting the virus with hashtags such as #iobevoitaliano, (I drink Italian) and #iolaperitivolofaccioacasa (I drink my aperitif wine at home) launched by Conegliano Valdobbiadene Prosecco Superiore DOCG, where there is a strong aperitif culture. Both hashtags invite people to share their photos enjoying in ‘lockdown’.

While national deliveries and on-trade consumption is dwindling, wineries are still exporting produce despite some delays. How long this will last is difficult to say, as much depends on the domino effect of the closure of restaurants, pubs, shops which is happening from country to country.

Mixed trends in exports

According to Renzo Cotarella (brother of Riccardo Cotarella) and CEO of Tuscany’s flagship winery, Marchesi Antinori shipments to foreign countries are in difficulty. Transport on wheels, has the additional problem of long queues, the safety of drivers and possibly the observance of quarantine.

Gaia Gaja, owner of the iconic Gaja winery in Piemonte has more positive experience. She says, “Our distribution includes some 100 countries and is based on on-trade sales which vary from 60% to 80%. Obviously, we expect a fall but it does not scare us. Not all markets are in the same situation, some Asian markets are already in a slow recovery phase. Our Asian importers have reported only a 10% drop in sales in the on-trade sector, while we are seeing US and European markets entering a more critical stage.”

Difficulties at importers’ end

Some wine importers in Asia are facing supply difficulties. Roberto Cioaca owner of Heritage Wines in Hong Kong with an extensive Italian portfolio advises that all shipments whether by sea or air are delayed making it very difficult to supply the market. In January his sales were down by 60%, in February 85%, in March things are starting to improve, but marginally. “Nobody wants to discuss wines. All 5- star hotel have been running below 10% occupancy for the past 2 months and the government just closed the borders: everyone arriving gets put into quarantine. So no tourists and poor sales,” says Cioaca.

David Gleave CEO of Liberty Wine in UK, has not experienced any problems getting wine out of Italy. “Our producers have been superb, and transporters have done a brilliant job,” said Gleave. “However, sales in restaurants, pubs and hotels have slowed dramatically, and are expected to cease completely next week. Asked if the UK was drinking more at home, “some people are, but overall I don’t think that is the case,” he said.

Cristian Valbruzzoli of Lyra Wine Imports in California confirms he is still receiving imports from Italy while there are restrictions from France and other European countries. Valbruzzoli will be receiving a shipment of Italian wine in the coming days from Livorno in Tuscany. He confirms that people want to support Italy and people are stocking up on Italian wines to drink at home.

Vinitaly 2020

Another debated issue in the Italian trade is Vinitaly 2020, its largest and main engine of Italian wine trade which has already been postponed to 14-17 June 2020. On April 3 they will announce either to go ahead or move to 2021. Many producers depend on this annual trade fair but others are concerned that the trade will not be properly attended.

Piero Mastroberardino owner of the Mastroberardino Winery in Campania and President of Federvini Wines Group and of Istituto del Vino Italiano di Qualità, as well as a member of Grandi Marchi, believes that conditions due to Covid-19 are not conducive for such an event in June. “This health emergency is still exploding in many countries of the world, flights have been cancelled, boarders closed and the trade has no intention of traveling in the coming months, at least not until it’s sure that we are clear of the pandemic, which seems unlikely to happen in the coming weeks,” says Mastroberardino.

Recently five Consortiums from Puglia banded together to voice their concerns of investing money in a lost cause, especially at a time when wineries are already being economically hit by the general ‘lockdown’.

Aftermath of Covid-19

“As for the aftermath of Covid-19, and the future of Italian wine, it is difficult to make predictions,” says Renzo Cotarella. “However, considering past crises we have got through them-such as the methanol scandal of 1986, the twin towers attack and the 2008 global meltdown. We have overcome these and we will overcome Covid-19. I believe that wine has a big advantage. It is pleasurable and convivial and it will always be enjoyed by people who want to share an experience,” he opines.

Gaia Gaja is an optimist who believes Italy will survive and its exports are destined to grow thanks to the competitive export prices and excellent quality- price ratio. She stresses the advantage of 25% tax that other competing nations are saddled with and is also confident of growth in Asian markets. She believes that Italy was the first European country to be affected by Covid-19 and it will be the first to recover.

As in all critical situations thanks to Italy’s model and its efficacy of family companies, more flexible and more inclined to make sacrifices when needed, Italy once again will prevail.

Michele Shah

delWine has been supportive of Italy and Italian producers who have been saddled somehow with Covid-19 and are now facing it the best way they can. We have been requesting importers and consumers in India and across the globe to support them at their time of difficulty.

We are also in consonance with Mastroberardino about cancelling Vinitaly 2020. For Giovanni Mantovani CEO of Veronafiere, organisers of Vinitaly it is after all a commercial venture and they would like to salvage the situation as much as possible. Many small producers are quite dependent on the Show but unfortunately they also ought to realise that the participation might be dismal in June. Like Prowein, Veronafiere would be wise to consider cancelling Vinitaly this year and start preparing for Vinitaly 2021-editor

Michele Shah is an Italian wine expert from UK, living in Tuscany for over 2 decades and has worked with Indian Wine Academy in promoting Italian wines in India and elsewhere. She writes occasionally for delWine as our Italian Correspondent. This Article is based on an Article she penned recently for The Drinks Business-editor

 

 

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