The year 2020 is coming to an end… And if it hasn’t been easy for many of us, it hasn’t been easy for the world of wine either. Whether it was the Covid-19 pandemic, the Trump tax in the United States, or the fires, this 2020 vintage has been marked by many events. Here is a retrospective of this year in the world of wine…
Heat and taxes on wine
January – February
Fires in Australia
This year started off strong for Australia’s vineyards, which were hit hard by devastating fires. The vineyards in the South, towards Adelaide, were the most affected, with nearly 2,000 hectares of vines gone up in smoke, representing about sixty farms. Moreover, these fires occurred only a few weeks before the local harvest. So it was the work of an entire year that burned for some winegrowers. About 30% of the vines in this region will not give good results this year. On the one hand because of the destruction caused by the fire but also because of the damage caused by the smoke.
New taxes on wine in 2020?
In Europe, producers are becoming increasingly concerned about export markets. Indeed, the Brexit and the Trump tax in the USA are likely to disrupt this trade, which is usually quite lucrative for winegrowers, especially French ones. As a reminder, the new regulation of Donald Trump’s government includes the increase of the tax at the entry of the American territory to 25% of the price of the goods. This new tax came into effect in October 2019, but the winemakers only felt its effects at the beginning of the year.
The Lockdown: season 1
March – April
The Covid-19 reaches Europe, causing the cancellations of many wine fairs and shows. This was for example the case of ProWein in Düsseldorf, one of the largest fairs in the world (the largest in Europe), which had to cancel its 2020 edition. The cancellations of these fairs, which are real showcases for many professions in the wine industry, are a major setback at the beginning of this year.
In mid-March, France decreed lockdown. While wine stores are considered essential businesses and were able to stay open, the period was darker for restaurateurs, who had to close their doors for many weeks. This situation had therefore an impact on wine orders from producers.
On the other hand, most of the online wine sales sites achieved excellent sales during this period. The beginning of the health crisis did not therefore have a major impact on online wine retailers in France and Europe.
The end of the lockdown
May – June
The world is slowly coming out of its numbness, activity is adapting and seems to be picking up again. We are witnessing a surge of solidarity in the wine world.
- Idealwine collected 134 626 € for the benefit of the collective ” Protect your caretaker “, during an auction.
- The House Billecart-Salmon and Millésima join forces to support the Fondation des Hôpitaux de Paris-Hôpitaux de France.
- Producers from Bordeaux organize a solidarity auction for the benefit of hospitals in their region.
- Aveine founds Collectif21 to support winegrowers in difficulty during the crisis by giving them visibility.
A very hot summer
July – August
The rather warm year allowed the different vineyards of France and Europe to develop well, without too many frosts or hailstorms. Professionals in the sector are unanimous: this 2020 vintage should be a success. The producers have been only slightly affected by the health crisis. Indeed, they have been able to continue their work on the vines, and thus prepare a vintage that promises to be excellent.
The start of the harvest was therefore earlier than in previous years, beginning as early as mid-August in some areas of southern Europe.
As far as wine tourism is concerned, the summer of 2020 in France will finally have been a fairly good period for some wine professionals, especially wine tourism and wine merchants. French people were able to go on vacation and travel around France. The only problem in this sector in France was the lack of foreign tourists.
The terrible fires are back. This time it is Amazonia, California and the southern United States that are affected, with fires as devastating as those at the beginning of the year in Australia. Several farms have been destroyed. This is the case of the Signorello Estate vineyard and the Frey organic winery, in particular.
On the financial side, finally, the tax imposed by the U.S. on European wine will have already caused more than 500 million euros of damage. This amount is well above the estimates for the year.
The publication of IOV figures
On October 27, 2020, Paul Roca, director of the International Organization of Vine and Wine, gave an online conference, due to the sanitary situation, the figures of the productions of this year 2020. Here is what he said:
- The OIV estimates world production at 260 million hectoliters of wine, a fairly stable production compared to 2019 (256 million hl).
- Within the European Union, production is estimated at 160 million hectoliters, 5% more than in 2019.
- Italy, the world’s leading producer in 2019, is down 1% (47 Mhl), while France, the world’s 2nd largest producer, is up 4% (44 Mhl). Spain, the world’s 3rd largest producer, is up 11%, with 37 Mhl produced. The production of these 3 countries represents almost half of the world production, with 49%.
- Outside Europe, the USA increased its production by 5%, with 25 Mhl produced, while China stagnated at 8 Mhl produced.
- In the southern hemisphere, this is the lowest harvest in 15 years, with 21% of world production. The 4 leaders in this hemisphere are Argentina, South Africa, Australia and Chile, with about 10 Mhl produced.
This stabilization of production can be explained by different reasons:
- The will of the producers not to increase the production volumes due to the Covid-19 crisis.
- The impact of droughts and forest fires, in some regions of the world. Argentina, for example, has seen its production fall by 17% as a result of various climatic hazards. Chile too, with a 13% reduction compared to 2019. Finally, Australia, which was seriously affected by forest fires at the beginning of the year, saw its final production fall by 11%.
The Lockdown: season 2
It was a very good year for the Burgundian vineyard: no frost, no diseases, and a very sunny year. High quality wines are therefore expected. However, the coronavirus epidemic, and the successive restrictions on gatherings and the closed restaurants, in Europe and around the world, are likely to impact sales, despite the quality of the vintage. Only consumption at home remains stable, and may even increase as a result of the health crisis.
Meanwhile in the United States, a new president has been elected. Perhaps a hope for a step backwards on the Trump tax?
Beaujolais changes its habits
This year, lovers of Beaujolais Nouveau are deprived of their bistros and restaurants to celebrate the release of the 2020 vintage. Wine merchants and restaurateurs are getting organized to offer the precious nectar to take away or for delivery.
The 2020 Paradox
The lockdown will be “lighter” in december. But the end of the year festivities will be celebrated in a very restricted circle. Consumption at home has not decreased much due to the health crisis. So professionals in the sector hope that consumers will buy beautiful bottles of wine and Champagne for Christmas. The New Year’s Eve festivities, on the other hand, will not have the same favorable treatment as Christmas, due to a curfew, which is not necessarily very good news for the sector.
Finally, 2020 is a rather contradictory year for the wine world. The 2020 vintage is keeping all its promises, and is likely to be a great year for wine. On the other hand, the commercial year was strongly impacted by the global health crisis. And some businesses in the sector will find it difficult to recover.