French wineries consider how to keep the wine economy alive

Wine producers in the South of France are feeling the bite of lost orders and falling revenue. Jason Sych speaks to two estates about how they’re coping.
 

Chateau Saint Jacques d’Albas in Minervois
Chateau Saint Jacques d’Albas in Minervois

Coronavirus and lockdowns have brought hardship to wine growers in the South of France, as it has to those elsewhere. Income has fallen sharply from cancelled orders as restaurants around the world are shuttered. But even with no income, some wine estates think now is the time to spend money – to stop a bad situation from becoming worse.   

“As soon as the confinement was announced, most of the orders that were pending to be shipped were cancelled, or postponed,” said Olivier Faucon, founder of Mas Combarèla winery in Occitania, France.  

When the French lockdown began on March 14th, no one knew if wine shops would stay open. Wine distributors decided to sell existing stock and postpone or cancel all new wine orders. Consequently, Faucon’s March sales dropped by 75%, compared to March 2019—meaning cash flow is now an issue. “We still have costs, still have people working at the vineyard we have to pay,” said Faucon. The wine distributors, on the other hand, “are waiting for better days to see what is happening”. 

The French government has stepped in with subsidies for small businesses, which apply to businesses with ten employees or less who have lost more than 50% of their turnover because of coronavirus. For Faucon this is a good thing, as he wants to keep paying his suppliers. Not doing so would jeopardize their long-term working relationships, making future cooperation difficult. At worst, his suppliers, many of them small businesses themselves, would have to close.

Andrew Nutter, co-owner of Chateau Saint Jacques d’Albas in Minervois, also finds the situation difficult. “The biggest challenge for us was coronavirus came just before ProWein,” because ProWein is “basically the sales for the rest of the year,” he said. 

As with Mas Combarèla, orders for Nutter’s wines have been cancelled, and payments have not arrived. Although he admits this creates problems with cashflow for the winery, Nutter realizes it is not the biggest problem facing the wine industry in his area.  Like Mas Combarèla, he works with many small businesses, and Nutter knows he must continue paying those businesses so the entire network doesn’t fall apart. “We need to keep the machine working otherwise we are going to be in a lot of trouble, and they are going to be in lots of trouble.”

At the moment, the subsidies that mean Chateau Saint Jacques d’Albas can keep paying suppliers, for now. With no end in sight to the coronavirus measures, however, no one knows how long the subsidies will stretch.

Other French regions are in a similar position. According to Le Monde, Maxime Toubart, president of the General Syndicate of Champagne Winegrowers, Champagne is expecting up to a 70% drop in first quarter sales in 2020; Jean-Marie Fabre, president of independent winegrowers in Fitou, reported a 90% drop in wine sales within his region.  

Despite all the bad news, Nutter still finds something to be optimistic about: he has seen an increase in direct-to-consumer sales. 

“Wine is still being purchased,” he said, although not by distributers and exporters, but by individual customers. “Most of them are buying more than normal,” although he isn’t sure if the numbers are just an initial jump because of people stocking up on supplies, or if it is because people are actually drinking more.
Either way, he said, it offered a glimmer of hope. “We are reassured that people are buying wine, and not just toilet paper.”

Jason Sych

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