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Coronavirus update: Outbreak prompts wine and hospitality industry ripple effects

March 13, 2020

Please note: This post has been updated with new information as of April 13, 2020

In a remarkably short period of time, the outbreak of COVID-19 has already had major negative impacts on wineries of all sizes in all regions, of all countries, undoubtedly with more to come.

For the travel, dining and wine industries, the economic pain is growing. Airlines have been cutting back on flights and suspending fees for passengers looking to change their travel plans. Major hotel chains, including Marriott, Hilton and Hyatt, have been suspending many fees for customers changing their reservations.

The streets of Rome are empty. The Vatican closed St. Peter’s Square to visitors. Italy is at a standstill. On March 12, the Italian government tightened their lockdown. All businesses must be closed, except for food stores, pharmacies, tobacconists and newsstands. Restaurants must all be shuttered.

Read Also: Books on wine: What to read while self-isolating

Italy’s wine industry had already been feeling the impact. Last week, when Northern Italy was the primary focus of quarantine efforts, the region of Veneto postponed the deadline to request rural development funds that could benefit vineyards. Two days later, Vinitaly—one of the largest wine shows in the world—announced it would be shifting its start date from April 19 to June 14.

France may be Europe’s most highly-touted wine producing country, but Italy is the world’s largest wine producer (followed by France, Spain, and then the U.S.).

Speaking of France, Bordeaux’s much celebrated annual tasting of the latest vintage has also fallen victim. On March 13, the Union des Grands Crus de Bordeaux (UGC) announced that the En Primeurs week scheduled to take place at the end of March has been postponed.

coronavirus outbreak

All of Italy is on lockdown due to the COVID-19 outbreak
(Photo by Marco Di Lauro/Getty Images)

In the United States and Canada, wineries are now choosing to close in order to promote self isolation among local residents and tourists.

Although production will continue — at this time of year, vines are pruned and some wines are bottled — the effects of the self-isolation advisory will be a major blow.

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In California, wine production and wine-related tourism contributes $57.6 billion to the state’s economy and $114.1 billion to the U.S. economy. The state’s wine business directly and indirectly generates 325,000 jobs in California and 786,000 across the nation.

The potential financial losses for US-wide wineries in March alone are estimated to be as high as $400 million. The average winery is anticipating a 63 percent decrease in sales for March—a number they expect to jump to 75 percent for April. And if wineries were able to resume operations on April 30, the average winery would likely require 12 weeks to return to normal business in terms of employees, visitors, sales and other factors.

Read Also: California #strong: Overcoming drought, wildfires and rising prices

In Ontario, wineries remain open as an essential service – but for curb-side pick-up only – and are offering free delivery on minimum order shipments. This is an effort to curb the losses associated with closing down tasting rooms, but how effective will it be when this industry relies heavily on the personalized touch of being able to speak directly with consumers and offer samples? That remains to be seen.

The LCBO (Liquor Control Board of Ontario) also remains open but changes in the shopping experience have been addressed and formally announced by its President & CEO George Soleas.

“We are living and working in a time that was hard to imagine less than two weeks ago. COVID-19 continues to change the way we interact with each other both physically and socially, and that extends to the LCBO.” – George Soleas 

Soleas went on to say that “like grocery stores, we know we are a part of many Ontarians’ regular shopping routines and we want to continue to serve our communities as much as possible. Taking the lead from public health officials, we have and will continue to modify the in-store experience in ways that protect our valued staff and you, our valued customer.”

Ontario LCBO stores have modified their hours and will be closed on Mondays effective March 30th.

Beginning Monday, March 30, all LCBO retail locations will be closed on Mondays and new shopping hours will be 11:00 a.m. to 6:00 p.m. Tuesday through Sunday. You can continue to shop on LCBO.com and follow Canada Post instructions for pick up.

In British Columbia, COVID-19 is affecting the wine industry at every level of sales, marketing and production. With tasting rooms closed, there are layoffs and heavy loss of sales. The industry is trying to adapt by increasing online sales; it still remains to be seen if it will make up enough. Although the provincial government (like Ontario) is allowing wine to be purchased with take-away and delivery food orders, the closure of most restaurants means that a key sales channel has diminished substantially.

Read Also: A+ for BC wine – recognizing a world-class region

According to the BC Wine Institute, the COVID-19 crisis highlights the importance of free inter-provincial trade. This would allow people to support small businesses and local farmers and growers by legally receiving direct wine shipments from across Canada.

With 282 wineries and 923 grape growers, the BC wine industry is doing what it can to protect the more than 12,000 jobs BC wineries support. Almost all BC wineries are offering free shipping on orders, according to the BC Wine Institute. (Some have minimum orders in place; some don’t.)

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Major wine festivals are now cancelled. Among them is Taste Washington – an event held each year in downtown Seattle since 1998 and was scheduled to return to the CenturyLink Field Event Center on March 19-22.

Taste Washington is billed as the largest single-region wine and food event in the US. Last year, the event recruited 240 Washington wineries and 70 Pacific Northwest restaurants. This would have marked the 23rd annual event.

The California Wine Fair – scheduled to start its Canadian tour in Vancouver this month and continue into Calgary, Toronto and Montreal in early April – has been canceled. A new date may or may not be announced.

The International Cool Climate Wine Symposium (ICCWS), which was slated to take place this July, has also been postponed. It will now take place July 25-29 in 2021 at Brock University in St. Catherines, Ontario. Their official statement on the postponement can be read in full here.

On March 26th, Wineries of Niagara-on-the-Lake officially cancelled their annual ‘Dig Our Roots’ weekend-long event that was to take place from April 17-19. Their announcement included the fact that all previously purchased tickets would be refunded.

The annual Graze the Bench event, planned for June 6-7, has been postponed to the weekend of Aug. 29-30. Currently sold tickets will now be valid for the new dates and no new tickets will be issued.

One of the more prominent events in the Ontario wine calendar is the International Cool Climate Chardonnay Celebration (i4C). This year’s event was scheduled for July 17-19 and has now officially been cancelled for this year. Next year’s date has been set for July 23-25. This year’s event would have marked its 10th annual.

The 2019 California Wine Fair at Toronto’s Fairmont Royal York Hotel. The 2020 edition has been postponed until further notice.

For Chile’s wine industry, the effects of coronavirus are particularly evident at ports. A third of all Chilean wine is exported to China. Since the outbreak, exports have slumped up to 60 percent, with Chile blaming the downfall on both a slow in orders and a holdup at the ports.

Before coronavirus, China admitted up to 350 containers of Chilean wine a day. Now, an average of 50 cases per day pass through customs. The remaining cases sit in the port, unsold and unconsumed. Even with the backlog at the ports, few cases are being sold.

Brands around the world are now trying to reroute China-destined shipments via other countries on the continent.

As Portugal’s number of infected citizens increases, The Symington Family Estates in the Douro winemaking region announced that the Graham’s, Cockburn’s and Quinta do Bomfim visitor centres were closed as of Saturday, March 14 and will remain so until further notice.

In an official statement from Johnny Symington, Chairman of the family-run operation, he pointed out that “our plan is based on the World Health Organization’s recommendations, the guidelines published by the health authorities in Portugal and the decisions already taken by local and national governments regarding restricting social interaction to limit the spread of the virus.”

“Our clear priority is the health and wellbeing of our employees and their families, our customers and partners, as well as the wider public.” – Johnny Symington

Symington continued by saying that “we believe that these measures will contribute to a slower spread of the virus as well as a swifter return to normal life.”

Quinta do Bomfim

The Quinta do Bomfim tasting house is just one of the Symington Family Estates’ announced temporary closures.

Canceled conferences such as South by Southwest in Austin, Texas are dealing the heaviest impacts on restaurants and hotels. All deny restaurants millions of dollars of potential business. More cancellations and closures are sure to come. We will continue to update as news arrives.

Stay tuned…