EU wine companies seek help to mitigate “devastating effects” of Covid-19

The Comité Européen des Entreprises Vins (CEEV) has said wine producers in countries across Europe are reporting serious logistics challenges and a decline in sales, alongside reports that European vineyards are “drowning in surplus wine”.

Vineyards across many European wine producing nations – including Italy, France and Spain – are reported to be full of unsold bottles of wine as a result of the coronavirus pandemic, but also due to challenges prior to the virus, such as Brexit and President Trump’s tariffs. The surplus of unsold wine means that many producers are reporting that their cellars are full, and therefore they have nowhere to put this year’s harvest.

Meanwhile, in order to mitigate the “devastating effects” of Covid-19 – present and future – on the wine sector, the CEEV – which represents wine companies across the EU - has formulated a Covid-19 Wine Package, which suggests emergency measures as well as recovery measures.

Jean-Marie Barillere, president of the CEEV, said: “Considering the partial dismantling of the HoReCa (Hotels, Restaurants, Cafes) sector, the impact on tourism and the possible collapse of some wine importers and distributors, we should all understand that what we are facing is no short-term crisis. It will take time and require investments to recover wine markets.

“With the HoReCa closed almost everywhere, we estimate that 30% volume and 50% value of the EU wine market is locked. In addition, and after some signs of stockpiling early March, sales went down again also in supermarkets at the end of the month, reinforcing the negative trend of the wine market.”

He added that wine exports have become irregular and wine operators have reported that they have been unable to maintain their usual level of exports since the crisis started back in January.

Ignacio Sanchez Recarte, secretary general of the CEEV, said: “Emergency measures should focus on rebuilding wine markets and regaining market shares globally. This Wine Package will be shared with European and national authorities.

“As a first measure, it will be critical that the Commission authorises to ‘freeze’ economic resources not used under the wine National Support Programmes for the financial year 2019/ 2020 in order to keep them available for Member States until the financial year 2022/ 2023 to help the sector recover.

“To support the recovery of wine markets, we ask for further flexibility for promotion programmes, a temporary reduced VAT for wine products and the adoption of a modern framework for distance selling. To revitalise the sector, legal adaptations are needed to dynamise the aromatised wine products category and the creation of the non-alcohol and low alcohol wine categories.

“it is critical that the wine sector recovers on export markets. For this, a quick resolution of the commercial dispute with the USA is needed as well as further efforts to gain access to other markets.”

Barillere added: “In the short-term, we need to consider that the reduced wine sales and the high level of wine stocks may provoke problems in the normal balance of the wine market.”

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