Updated May 13, 2020: Italy has accelerated phase two of its coronavirus emergency plan and will permit bars and restaurants to reopen May 18, 2020.
One of the countries hardest hit by the novel coronavirus, Italy has suffered the longest and most rigidly enforced lockdown in the European Union. The nationwide quarantine that started on March 9 closed restaurants, wine bars and halted tourism. Cellar-door sales, crucial to many Italian wineries, and on-premise sales both domestically and around the world have collapsed. Vinitaly, the country’s most important annual wine fair for the trade, was canceled for the first time in its 54-year history.
With the 2020 harvest just months away and cellars across the country filled to capacity, various wine-trade associations have called on the government to approve emergency measures, including a controversial proposal to distill table wine stocks in order to obtain alcohol for disinfectant. While this may be a feasible option for cheaper wines destined for immediate consumption, it’s obviously not viable for Italy’s high quality, ageworthy wines.
The government began to ease restrictions on May 4, referred to as Phase 2 from the original lockdown restrictions, but this hasn’t helped the wine sector. People can now travel outside their towns and cities, but not their regions, and only for work or medical reasons. Restaurants are now allowed to sell takeout, but most remain shuttered due to the bureaucratic hurdles and expenses involved in revamping their business models.
“Nothing has changed since May 4,” says Soave Classico producer Andrea Pieropan. “Our office is open, but our tasting rooms and cellars are closed to visitors.” He adds that with restaurants in Italy and around the world still closed, the firm’s sales, dependent largely on the restaurant and hospitality sectors, are down 80%.
Like many producers, Pieropan has spent much of the last two months in the vineyards. “The distinction between the two realities, vineyards and the cellars, is surreal,” he says. “In the vineyards, everything has sprung to life and there’s so much to do while the cellar is quiet, with little activity and no visitors. It’s like wearing two different shoes.”
For some wineries, sales to supermarkets and large retail distribution chains have increased. According to Luca Sabatini, Export Director of Cantina di Soave, the firm saw “general sales in export markets increase 17% for the first trimester of 2020 compared to the same period last year. Alongside the stop of global onsite sales that began in March, there was a simultaneous increase in retail sales in all the main foreign markets.”
Rise of online sales
To help small Soave producers dependent on on-premise sales in export markets that registered significant declines in revenue, the Consorzio di Tutela del Soave has created an online platform to promote the wineries’ online sales.
“80% of Soave is exported, so the positive thing in this period is that small companies are now focusing on the Italian market via online orders and home delivery,” says Aldo Lorenzoni, the Consorzio’s director.
Producers across Italy are embracing online sales, like Brunello producer Ciacci Piccolomini d’Aragona.
“Our onsite wine shop generates about 20% of our overall sales, but with the shop closed, we’re now selling online directly, but keeping the same retail prices to avoid competition with wine shops,” says Paolo Bianchini, the firm’s co-owner along with his sister Lucia. He adds that the online sales division was also created “to keep the staff, who normally man the shop, working and busy.”
Does Bianchini feel this is the future for direct sales? “No, I think when people can travel freely again they’ll prefer to visit the winery, the vineyards, try and buy the wines onsite.”
Waiting it out
In Langhe, home of Barolo and Barbaresco, 2020 started off with robust sales, thanks in part to the buzz over the just-released 2016 Barolos, one of the best vintages in recent times.
“Thanks to strong sales in January and February, overall Barolo sales are actually up 5% for the first trimester compared to the same time last year, even if business dropped off dramatically in March and April,” says Matteo Ascheri, president of the Consorzio di Tutela Barolo Barbaresco Alba Langhe e Dogliani. Including the current vintages on sale, Barolo and Barbaresco producers have multiple vintages in the cellars undergoing mandatory aging requirements.
“With restaurants shut around the world and no tourists, things will be tough,” says Ascheri. “Barolo and Barbaresco producers will leave the very limited amount of government funding available for other denominations whose wines have to be consumed immediately. Instead, the Consorzio is working with major banks to get financing that will be guaranteed up to 90% by the government and will be distributed to our members to help them during this difficult period and the upcoming harvest.
“It’s crucial that Barolo and Barbaresco producers resist the urge to sell off their wines at discounted prices. Bank financing is key to ensuring they won’t have to do that.”
Restaurants in Italy are set to open June 1, but distancing measures will greatly reduce capacity and it’s unlikely that people will be racing out to restaurants immediately.
As Ascheri, also a Barolo producer, hotel and restaurant owner points out, “living in lockdown is against human nature. At some point, people will start getting together with friends and family, go out to eat and enjoy life again. Fine wine will be a part of that scene. Barolo and Barbaresco maintain their value over time, so we can wait.”