Italian winemakers crushed by coronavirus
With Italy’s restaurants and bars closed for another month and global trade snuffed out by the coronavirus, the world’s top wine-producing country is facing an existential crisis.
Italy’s 47.5 million hectoliters edged out France’s 42.1 million for last year’s global wine production crown, although France’s 9.8 billion euros (US$10.7 billion) in exports bested Italy’s 6.4 billion euros.
Producing nearly a fifth of all the world’s wine and selling more than half of it at home, Italy’s two-month lockdown has hit the Mediterranean country’s winegrowers especially hard.
Lodovico Giustiniani, president of the Confagricoltura agricultural lobby in the vineyards-filled region of Veneto, said the domestic market imploded when restaurants and bars closed in early March.
But the situation has not been much better for exports.
“Sales to the world’s restaurants and wine bars are now close to zero,” Giustiniani said. “The other channel, supermarkets, is still working but it can’t compensate for the sales of a channel that is completely at a standstill.”
Giustiniani’s own winery, Borgoluce, whose Prosecco isn’t sold in supermarkets but is exported to the United States and Asia, saw its sales fall by 90 percent last month.
High-end hurting
Some of Italy’s most prestigious wines are suffering from the worldwide lockdown.
For decades, Barolo has focused on “maximum quality,” earning a place on the wine lists of some of the world’s finest restaurants, said Paolo Boffa, president of the Terre del Barolo cooperative.
Long considered a strength, focusing on the high end is now hurting Barolo makers.
The situation “is very critical,” he said, given that 90 percent of Barolo is sold within the shuttered distribution channel of restaurants.
Other wines, such as Barbera or Dolcetto, are faring better due to their more affordable prices and supermarket availability.
However, “these sales cannot save the company’s balance sheet,” Boffa said.
Producers have not only sales to worry about but also logistics. Because wine stored in cellars hasn’t been sold, there won’t be more room for new wine made after the autumn harvest.
Barolo producers hope to store it outside traditional production areas, a practice normally forbidden under strict classification rules.
Another big question is whether to cut production in response to lower demand.
The Chianti Wine Consortium has already decided to slash production by 20 percent.
The measure, labeled “drastic” by its president Giovanni Busi, would likely cause serious economic damage to companies, he said.
Some producers are considering distilling part of their lowest quality wine and transforming it into ethanol, used for the manufacture of hydroalcoholic gel, currently in high demand during the lingering coronavirus pandemic.
The wine cooperatives of France, Italy and Spain have appealed to the European Union to earmark 350 million euros toward a European distillation project of 10 million hectoliters.
Coldiretti, the Italian agricultural association, presented the government with a plan to turn at least 3 million hectoliters of cheaper wine into disinfectant, a solution that could tempt producers whose wine has little shelf life, Giustiniani said.
However, this is not an option for topof-the-range reds such as Barolo, which can be kept for decades.
On April 27, Italy’s government announced that restaurants, bars and cafes would be allowed to end the shutdown and reopen their doors on June 1.
Italy’s wine industry, said Barolo producer Boffa, sees this as “great and beautiful news,” although he expressed skepticism that restaurants and bars will do brisk business teeming with customers anytime soon.
“We all understand the seriousness of this epidemic and the crisis it will cause for our families,” said Boffa.
“But we farmers are used to sacrifice, we’re resilient and once again we will not give up.”