The French wine industry has been hit by a perfect storm these past few months. The novel coronavirus pandemic and corresponding shutdown has compounded an already a delicate situation for many producers.
Apart from supermarkets, where sales remain strong, the shutdown has caused domestic sales to drop dramatically. Meanwhile, many U.S. importers are waiting for the pandemic to quell before confirming orders. Cellar door sales, which comprise up to 20% of profits for some producers, have totally dried up.
All this follows the 25% tariff imposed on French wine imports (except Champagne) by the U.S. administration last October. That led exports to the United States to fall 44% in November 2019. They dropped even further by December 2019, according to research from the American Association of Wine Economists.
Now, Champagne is also experiencing a dramatic fall in sales in the French market. Sales decreased by 70% in supermarkets and 100% in hotels and restaurants, which are now closed.
“French sales have fallen by 90% and it is the same in the export market,” says Michael Drappier of Champagne Drappier. He has never seen such a double whammy. “The messages are coming in in every language, ‘We are not cancelling but we want to delay shipments.’ ”
Pascal Verhaeghe of Château du Cèdre in Cahors is similarly affected. “Sales are down by 85%, so, although transporters are operating normally, there is very little wine for them to pick.” And, he says, “of course, our cellar door sales are closed.”
“We have found our exports holding up and transporters are still operating,” says Julien Révillon of Domaines Piron in Morgon, Beaujolais. “We are also delivering in France to off-trade businesses because they are not closed. And, although we have no cellar door sales, we are continuing to deliver to private customers.”
In the Loire Valley, Orchidées Maisons de Vin, a group of nine major producers, is still selling to its supermarket clients, although “they are feeble compared with normal,” says Bernard Jacob, the group’s managing director.
Transportation, particularly in the export market, presents its own share of problems. “We are finding it hard to get containers because our foreign clients have put them into confinement and we can’t get them back,” says Jacob.
The French government has taken emergency measures to help wine producers, particularly those whose exports have slowed or dried up. It now provides insurance on invoices worldwide and has increased the guarantee on deposits paid to exporters from 80% to 90%. These measures will last for a year.
One part of the industry that’s still holding up and demanding attention is the vines. Or, as Francis Abécassis of Domaines Francis Abécassis in Cognac puts it: “The vines just don’t wait.” This is a busy time in the vineyards, and so many wineries’ office staffs with little to do are joining vineyard workers among the vines.
It’s easy to practice social distancing in a vineyard, while hoping for better times by harvest 2020.
Published: April 21, 2020
