Coronavirus impact hits wine producers as Asian market slows

Some producers have reported a 90% drop in sales to China as consumers cut back, while a number of wine shows in have been cancelled...

As the grip of the Coronavirus strengthens across the globe many wine producers and brands are starting to feel the pinch, especially those with a large Asian customer base.

The problem for producers is two-fold; Chinese consumers are cutting back dramatically on drinking and many shipments of wine remain stuck at Chinese customs.

With China being the one of the world’s largest luxury markets – multinational groups such as LVMH and Pernod Ricard do 30% and 10% of their business respectively in China – there is real concern among producers.

According to Forbes, Spain’s leading wine brand Torres is expecting a major hit. It’s predicting an 80% drop in sales this month, and a 50% fall in March.

The affects are being felt elsewhere too; Chile exports a third of its wine to China and Australian wineries are seeing sales figures for China down as much as 90% across January and February.

Champagne producers have warned that the Coronavirus could put the brakes the expanding business opportunities in Asia for the sparkling wine.

‘Everything has stopped in China completely’ said Florent Roques-Boizel, president of Champagne Boizel in an interview about the impact of the Coronavirus with CNBC. The Chinese market for Champagne saw a 9.1% rise in exports to 4.7 million bottles in 2018.

Diageo, meanwhile, has warned that the spread of the virus in greater China and the Asia Pacific region could affect its 2020 profit to the tune of $260 million as bars and restaurants stay shut.

The London-based drinks company, which sold its leading wine brands to Treasury Wine Estates in 2016 to concentrate on the spirits and beer markets, has seen significant disruption to trading since the end of January.

On the ground in China a number of wine shows have been cancelled or postponed. China International Alcoholic Drinks Expo (CIADE), TWC Chengdu Fine Wine Showcase, Sud de France Wine Roadshow – 2020 Spring Session and The China Food & Drinks Fair (CFDF) have all been affected.

Translated by Sylvia Wu / 吴嘉溦