There would be less consumption, and surplus of wines

COVID-19 has done lots of damage to the global economy, which of course include wine business. Pau Roca, Director General, International Organisation of Vine and Wine (OIV), feels that the lockdowns in the US and Europe have resulted in huge decline in global sales of wines. Internationally, we are witnessing two trends; a shift in sales channels and a fall in demand because consumption is going to reduce for at least a period of two years, which in turn would produce surpluses, he says.

As the head of the OIV, which is an intergovernmental organisation with 47
members, Pau Roca has his ears to the ground and is worried that due to the COVID-19 induced economic catastrophe, the economic crisis is not going to be over too soon. “Even after we come out of this crisis, the offline wine sales would continue to be badly hit as the purchasing power of the people would be reduced because of the COVID-19 induced global economic crisis. However, the Internet sales of wines could get a fillip, but its base is very small in most countries,” explained Roca.

Plummeting Sales

He says that the plummeting of wine sales is not only due to shutting of restaurants, cafes, or hotels, but also due to the near absence of tourism during lockdown periods. The US is perhaps the most affected; Europe and China are also badly affected (though China is recovering fast). Europe and the US happen to be the major consuming markets for wines.

He points out that on-premises sale in restaurants entails lots of diversity, which gave scope to a multitude of wine brands to appeal to a wide variety of consumers. Now with extensive closure of restaurants due to COVID-19 that lucrative sales avenue has been severely compromised. “The wine list in restaurants can easily cater to different profiles of consumers. This diversity of choices is quite impossible to achieve in off-premises channel sales of wines. Moreover, in off-premise sell, the pressure on price is bigger and margins are smaller. In restaurants, cafes and hotels you tend to have a very large number of suppliers,” he elaborated.

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