Expertise

‘The Cost To Our Country Is Going To Be Huge’: Winemakers On The Devastating Effects Of Covid

Covid-19 has had catastrophic effects across the wine industry, with job and profit losses just the tip of the iceberg for some. Joanna Goodman speaks to industry experts and the growers themselves to uncover the full human and industry impact of the pandemic.

Winemakers On The Devastating Effects Of Covid
Paul Symington
Paul Symington

Winemakers are a resilient bunch - they're farmers after all. The prospect of losing a crop to hail or frost or having a poor harvest; physical hardships and the constant spectre of financial ones are nothing new to most of them. Many of the producers that The Wine Society works with are several generations old. Their predecessors have survived world wars, financial crashes and even pandemics before.

Talking to Club Oenologique's Adam Lechmere, Paul Symington of Symington Family Estates actually uses a wartime analogy to describe the threat of Covid:

'[We are] facing a crisis similar in its gravity and extent to that that my parents faced from 1939-45 and my grandparents faced in the great depression of 1929-33 and the 1914-18 war. They fought (some literally) through those times and now so will we. This is a huge surprise to me. I never thought that we would be faced with a similar challenge.'

As governments around the world struggled to control the virus by bringing in more or less draconian restrictions, the common element that was to have a massive effect across the board was the loss of the on-trade business. Director of Wine at The Wine Society, Pierre Mansour explains:

'For wine businesses that sell to restaurants, whether a producer directly or via a wholesaler, the impact of the crisis was immediate with the shutdown of the hospitality sector. This was keenly felt by many of our winemakers as we tend to work with smaller producers that generally rely quite heavily on restaurant trade.'

Loss in sales from this channel was clearly going to have a severe effect on producers around the globe and those who work in the hospitality industries, but as we were to learn, there were even more severe challenges to The Wine Society's producers, depending on where in the world they are based.

Infographic

The effect of Covid-19 around the world

South Africa: worst hit of all wine-producing nations

While most governments around the wine world considered wine production 'essential agricultural work' allowing vineyard jobs to continue and producers to trade, South Africa has stood alone as one of the worst hit of wine-producing nations. The country's strict lockdown measures initially banned all winery and vineyard work and while most had finished harvesting, some still had grapes to get in. Vergelegen, for example still had a week's worth of prime cabernet hanging on its vines. The wine industry bodies lobbied for dispensation which was eventually granted permitting the completion of harvest.

But with an initial ban on the sale of alcohol (including exports), pressure for space was mounting in the cellars. Specialist importer of South African wines, Richard Kelley MW had first-hand experience of events as they happened:

'I was in South Africa in March for a family wedding, planning to return as usual in April/May to visit producers and place orders. When I saw what was happening around the world, I realised that I might not be able to get back, so quickly made appointments to see some key suppliers. The previous week a Dutch importer had been showing a group of students around the Cape winelands, it turned out that one of them had tested positive for Covid-19 so some of the wineries were already self-isolating; others refused to see visitors just in case.'

'The ban on exports effectively lost us two months. We had some stock in the UK to keep us going but we knew we would be in trouble by the end of May if things didn't start to move again. As soon as the ban was lifted [on 1st May] we got three container loads over with another on the way, but because of the strict social-distancing laws, ports are only working at 25% capacity, not only that but at this time of year, fierce storms add to the difficulties.'

Deidre Taylor of Kanonkop
Deidre Taylor of Kanonkop

Deidre Taylor of Kanonkop spoke to us further on the economic and subsequent human cost, which she fears will end up being worse than that of the pandemic itself:

'One of the hardest elements to deal with as a business is the constant change, making it impossible to plan. First there was a total ban on all work in the vineyards and winery, a ban on exports and local sales; then export sales were permitted from 1st May but the prohibition on alcohol sales remained until 1st June, with restaurants and bars re-opening mid-June. The government reinstated the ban on July 13th and then relaxed it on 17th August. We all understand why these measures were taken, but it has created huge problems. Our country has worryingly high infection rates for HIV and TB and we needed to protect the resources within out hospitals. Trauma units couldn't cope with any increases in road traffic accidents or violent attacks, sadly attributed to the misuse of alcohol.'

'But the most worrying thing is the long-term fallout economically for our nation. Here at Kanonkop, for example, we have responsibility for 65 families. In South Africa every employed person supports at least 15! We as a brand will be ok, but for the bulk side of our business which we sell under the Kadette label, we buy in from more than 22 different growers. 60% of sales for this label are on the domestic market so it is hard to see how we'll make up for these losses.'

'And it isn't just the people who work directly in wine: we are already seeing redundancies in the associated businesses as well; glass production, printing and design, sales and marketing, hospitality – there were 117,000 job losses in the first round of prohibition – 13,000 a week. The cost to our country is going to be huge – we have a small tax base and it is being hit hard. Out of a population of 60m only 10-11m are employed.'

On rather an emotional personal note, Deidre Taylor finished our conversation by saying how hugely appreciated it is having a relationship like the one they enjoy with The Wine Society and how sometimes, things happen just at the right time for a reason. She told me how she had been working on a special wine for The Wine Society with buyer Jo Locke MW, a conversation that had started when she was pregnant. The wine has just been bottled and labelled under lockdown and is ready to ship; Deidre's daughter is now three! 'This was an exciting project and one we are immensely proud to be a part of but there had been several delays along the way which had seemed frustrating at the time; now it seems that the timing couldn't have been more perfect. The order came along just at the right time when we most needed it, for which we are extremely grateful.'

South Africa clearly has had it tough and Richard Kelley MW fears that the full effects won't be felt until next year when the true cost of cancelled orders, particularly in the bulk and brand sectors is seen.

Wine drinkers around the world have united behind the social media campaign #SaveSAwine and #JobsSaveLives but it is going to be a long road to recovery.

Wine drinkers around the world have united behind the social media campaign #SaveSAwine and #JobsSaveLives but it is going to be a long road to recovery
Wine drinkers around the world have united behind the social media campaign #SaveSAwine and #JobsSaveLives but it is going to be a long road to recovery.

The situation in Europe

Domaine Jaume
Putting the family (and pets) to work! Domaine Jaume

As countries across Europe went into lockdown, the vineyards were just springing into life in the northern hemisphere and nature is indifferent to human woes: work in the fields has to get done regardless. Some parts of the wine world were tragically affected by human loss though, particularly in parts of northern Italy and some of the villages of Rioja, which were some of the worst affected and first to suffer losses of life after Madrid.

Some producers rely on foreign workers to help in the fields at this time of year too, clearly with this not an option, it was a question of getting the whole family into the vineyards or redeploying sales staff to tie vines:

It isn't hard to maintain safe social distancing in the vineyards, and many of The Society's producers kept in regular contact, sending photos and videos showing how they were adapting to new ways of working.

Nick Bielak of Italian specialists Vinexus, who work with partners around the world, provided an interesting perspective on the situation for Italian producers: 'A full picture of the real cost to the Italian wine scene won't really emerge until the autumn. Italian producers, particularly those with whom The Wine Society works, are very focused on the hospitality sector, and mid to high-end restaurants especially. They have been severely affected by closures in their historical markets, the USA in particular. There is talk of mass distillation of a lot of 2019 white wine, which would be a tragedy.'

He said that the Italians are a philosophical bunch, though, who will consider 2020 alongside other extreme vintages of the past and that they are looking ahead optimistically to things getting back to normal.

Bursting the Champagne bubble

Producers of sparkling wine and Champagne have been badly affected by the pandemic – what's there to celebrate, after all? Even in France where bubbles are seen less as something to keep for special occasions, it is a sector heavily reliant on the on-trade. Olivier Dupré of Alfred Gratien Champagne and Gratien & Meyer in Saumur told us more:

'The on-trade business is down by 50% and though restaurants are now opening up again, business is still slow to build. Luckily, we have been able to able increase sales through our own website and through the off-trade too. We are also grateful for the support of Wine Society members who took up our offer of en primeur 2012 Champagne and will, we hope, enjoy some super Crémant in an autumn offer. Strong relationships like ours really help at times like this.'

Nicolas Jaeger and CEO Oliver Dupré of Alfred Gratien / Gratien & Meyer
The new normal: Nicolas Jaeger and CEO Oliver Dupré, current representatives of our oldest suppliers (Alfred Gratien / Gratien & Meyer), joined us for a Zoom chat back in May

In the Champagne region, there's the added challenge of fixing a price for grapes from the growers. Early on there was stalemate in the negotiations between Champagne houses and the region's growers who refused to limit the harvest to that requested by the houses (as a way of avoiding a surplus and therefore a plummeting of Champagne prices). You can appreciate both sides of the argument. However, the latest news is that harvest has come early and the growers have compromised, agreeing to reduce yields in order to protect prices. The average vineyard size is just three hectares, so for some growers this will result in substantial losses this year. Another example of the twists and turns that the pandemic has presented to winemaking regions.

Of course, with harvest approaching fast and already underway in places, winemakers across Europe will be faced with the challenge of making sure they can recruit enough pickers and that everyone can work safely in the field and winery. It's a stressful time under normal circumstances; 2020 will be especially so. The good news is that from what we've heard so far, the quality of the grapes is looking pretty good across the board.

Caroline Frey, head winemaker at Jaboulet Aîné
Caroline Frey, head winemaker at Jaboulet Aîné

2020: 'A glorious vintage'

It seems almost bitter irony that 2020 is shaping up to be a glorious harvest for many. New Zealand struggled to complete harvest safely and within the strict guidelines to curb the virus, but complete it they did.

This year will be remembered not only for the pandemic and the surreal times of lockdown but also for the glorious quality of the 2020 vintage.
Paul Brajkovich of Kumeu River

With international travel banned and borders closed, we learnt from Chris Stroud, marketing manager for Europe for nzwine.com, that the country has been putting energy into encouraging domestic tourism with a campaign to 'Visit the Vines' to make up for the shortfall from international visitors.

Australian producers are similarly upbeat about the quality of the 2020 vintage (though generalisations across such vast regions are not so easily made). But Australia barely had time to recover from the terrible fires that ravaged large parts of the country at the beginning of the year and had also had to deal with drought and frost in places too. Again, at the time of writing, Melbourne was going back into lockdown with further impact on sales in the on-trade which had just started to pick up. At times like this, being able to fall back on the long-term relationships that The Wine Society has with key producers in Australia is providing a vital lifeline. ​

It filters through to the morale of all our staff knowing care and support has come in from all around the world. Thanks to Freddy Bulmer [Society buyer for Australian wine] and all the members of The Wine Society family for this virtual hug of support.
Mac Forbes
Cows
Bleasdale
Bleasdale delivering to the Strathalbyn Railway Station late 1800s and with their shiny new van

In South Australia, Paul Hotker of one of Australia's oldest wine businesses told us how they were adapting to the strange new normal: 'The pandemic has created some significant changes to our business with shifts in consumer behaviour, changes in sales and distribution channels and closures of pubs and cafés locally, interstate and overseas. This has naturally led to changes in the way we service our customers. Starting with the purchase of a van for Adelaide and local deliveries we are increasing our direct from winery business as well as other avenues, considering the circumstances we are travelling quite well and heading in a positive direction.'

The situation in South America

South America has been hit tragically hard by the pandemic as we have all seen in the news. Chile has had one of the highest infection rates of the virus, and this comes on the back of the political and social unrest earlier in the year. Rafael Urrejola of Undurraga told us that they had been forced to close for a couple of weeks after there was an outbreak of infection in the winery, despite careful precautions being taken. Fortunately all recovered; meanwhile, an early vintage meant that they had to rush to pick fast: 'We had a very warm and dry year, and grapes were ripening fast and at the same time covid-19 was penetrating our cities even faster.' He talks about a rollercoaster of emotions, trying to care for wine and people and that despite everything, the wines are showing very well: 'wine is extremely loyal and even though we had to do many things differently this year, our wine is still there, ripe, healthy and waiting for us.'

In Argentina the virus is still accelerating in parts of the country and as Iduna Weinert told us, 'our hearts have been introduced to the true meaning of empathy,' going on to say that it has made everyone, 'focus on the importance of co-operation… and highlighted more than ever that the world is becoming smaller, with there no longer being such a thing as a purely regional impact.'

our hearts have been introduced to the true meaning of empathy
Iduna Weinert

The plight of Lebanon

The production of wine in Lebanon is tiny in global terms, so it rarely makes it into any worldwide comparisons when talking purely wine. Sadly, the current crisis has brought the plight of this tiny wine-producing nation into sharp relief. As if the country wasn't struggling enough already with the impact of the virus, the situation with Syria and the growing population of refugees, on top of social unrest and an economic crisis, the massive explosions which ripped apart of Beirut's port district on 4th August were an unimaginably devastating horror.

The embattled Lebanese wine industry might be tiny (and it is certainly resilient, carrying on making wine even in times of war), but wine is one of the very few goods that the country exports and so plays a disproportionately large role in the economy. So, while The Wine Society hadn't included Lebanon in its autumn offer to members, it quickly put together a special mixed case and immediately placed orders for more wine from its suppliers in Lebanon, so that it could help out in the way that its suppliers had said would mean the most. It also donated wines from its reserves for an online auction to raise funds. Pierre Mansour, director of wine and The Society's buyer for Lebanon said, 'sadly two of our suppliers, Massaya and Musar have both lost lives in the blast, but they and a third supplier from whom we buy, Tourelles, have all asked that we show support by continuing to buy their wines. Of course, The Wine Society will not be making profit from these sales, merely covering costs and Massaya in turn are also giving £10 per case shipped to the Lebanese Red Cross.' Wine Society members are long-term followers of Lebanese wines and immediately got behind this initiative with the first case offered selling out in less than 15 minutes.

Harvesting in the Bekaa Valley.
Harvesting in the Bekaa Valley. The Lebanese are truly one of the world's most resilient winemakers, but their country is suffering more than any at the moment

Wine - a simple pleasure that can give so much

It feels almost trite after hearing about so much suffering around the world to bring everything back to the simple pleasure of a glass of wine, but its importance was something articulated so beautifully by Guillermo de Aranzabal Agudo of La Rioja Alta at one of The Society's Zoom tastings in May:

It is important to know why we make wine. We make wine just to give you pleasure, that's the only reason. That is one of the beautiful things about our business. There are very few industries that can say their only purpose is to give you pleasure.
Guillermo de Aranzabal Agudo of La Rioja Alta

Guillermo, like all the winemakers we spoke with, feels a responsibility not just for his business but for the many families it supports, particularly in the current climate. So, while we can take pleasure from their toil we should continue to do so, without guilt but with the added knowledge that we are giving something back and completing a virtuous circle which has to make that glass of wine taste so much better too.

Guillermo de Aranzabal Agudo of La Rioja Alta
Guillermo de Aranzabal Agudo of La Rioja Alta at one of The Society's Zoom tastings in May 2020
Joanna Goodman

The Society's News & Content Editor

Joanna Goodman

Part of our Marketing Team for over 30 years, Jo has been editor of Society News for much of that time as well as contributing to our many other communications.

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