The New Crown pneumonia epidemic has hit wine sales, along with exploding cellar stocks, and the world's two largest producers, Italy and France, are planning to cut wine production in the upcoming harvest season to raise prices.
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Italy"s domestic wine demand this year is expected to decline by nearly one-third, foreign sales also fell, because of the embargo measures caused by a sharp decline in tourists, hotels, restaurants and bars also closed for months, wine merchants worried that this year's losses may reach about 1 billion euros, accounting for 9 percent of total sales.
According to the plan of the Roman authorities, Italian wine production will be reduced by about 5% compared to last year. The Italian government has allocated 100 million euros ($119 million) for this purpose to compensate businesses that have discarded 15 to 50 percent of their grapes.
The wine region of Tuscany (Tuscany) also spent 6 million euros last week to help winemakers build more storage space, but Polini, president of the Tuscany Vintners Association, said many winemakers would rather throw away their grapes; the excess stock harvested during the region's last harvest alone could make about 2 million bottles of wine.
Wineries growing Brunello grapes have agreed to cut production by 12.5 percent this year, and year-to-date, the vintners have sold only half of their target sales for the year, an industry source said.
The Champagne region also began harvesting fewer grapes this month, despite the fact that France has not yet established a subsidy program. The Union des Châteaux de Champagne (UMC) said it hopes to see top yields this year down 40 percent from last year.
The CIVC estimates that as many as 100 million bottles of Champagne will be left unsold this year and overall revenue will evaporate by more than €1.7 billion.
Authorities in Paris and Rome have set aside a fee to help winemakers distill excess wine into sterilized alcohol and perfume. France last week also offered a financial support program for wine merchants, the size of 250 million euros.