The 2020 edition of Mediobanca’s annual wine industry survey reveals that more than 60% of the Italian wine companies surveyed expect their sales to fall this year. Their overall outlook is more pessimistic than it was in 2009, at the height of the global financial crisis.
The Italian wine sector is under pressure on all fronts, with tourism and travel retail shuttered, exports falling and domestic consumption contracting due to the pandemic’s impact on the on trade.
These are the findings of Mediobanca Research Area, the research arm of Mediobanca investment bank, which conducts an annual survey of the Italian wine industry. This year, the bank surveyed 215 leading Italian companies with a 2018 turnover of above €20m, as well as another 14 international Italian companies that each have a turnover of more than €150m.
“Of the companies interviewed, 63.5% expect sales to fall in 2020, while 41.2% of the sample expects to see a reduction of more than 10%,” says the report.
The pessimism extends across the sector, from exports to domestic sales. “The World Trade Organisation has estimated that the contraction in global demand for wine will be between 15% and 30%,” the report went on.
If Italian wine exports fall, in line with the WTO’s expectations, Mediobanca estimates the largest Italian wine producers will collectively lose between €0.7bn and €1.4bn in sales.
As for the home front, around 65% of sales are made outside of the large retail channels, from the on trade through to cellar doors, all of which were badly affected by the lockdown. “A loss of over €0.5bn is estimated up to mid-May,” says Mediobanca, which also estimates that sales will stay down as Italy opens up.
“The pictures leads us to estimate that the overall contract in 2020 revenues will be in the region of €2bn, as a result of lower domestic sales and exports,” it continues, “the year-on-year reduction for the sector therefore being somewhere between 20% and 25%.”
There are some bright spots – sparkling wine makers are much more optimistic than their peers in still wine. While 55.5% of sparkling wine makers expect sales to fall, they are looking forward to the end of the year, when they believe the Covid-19 crisis will be over and people will want to celebrate.