There’s good news and bad news about the impact on the wine industry of the corona virus, and Donald Trump’s sudden European travel ban. You’re likely seeing a lot of bad news elsewhere, so let’s lead with some of the good.

People will keep drinking wine, even in a quarantine.

Because of Trump’s tariffs on many French, Spanish and German wines last year, and the lingering threat of even more tariffs, many distributors and retailers brought in more wine than usual. So inventories in the US are pretty good

Wine production in the Northern Hemisphere, including all of Europe and the US, is in a slow period anyway, with the vines just waking up from their winter slumber. It’s possible the 2020 vintage will not be much affected.

Despite some initial confusion, Trump’s travel ban applies only to people, not goods, so wines can continue to be imported even from hard-hit countries like Italy.

The coronavirus (Covid-19) cannot survive on inanimate objects for the length of time it takes shipments of wine to cross the Atlantic Ocean. Wine shipments should be perfectly safe, which is why they are still continuing.

“At this point, the flow of wines has not stopped,” Scott Ades, president of Dalla Terra Direct, told Wine-Searcher. “The situation in Italy is creating some challenges but the wineries are sending out notices that they’re still sending out wine.”

The downside

Feel better? Good, because here’s the bad news.

Restaurants – a key market for artisanal wines – are already experiencing a sharp decline in business.

“We were at lunch with retailers in Morton’s Steakhouse (in Manhattan),” Anne Bousquet, CEO of Argentina’s Domaine Bousquet, told Wine-Searcher. “It was a quite large restaurant inside. I think there were two tables [of diners]. There were far more staff than diners. We went to an Italian restaurant the day before and the owner told us she was going to have to shut down and lay off staff.”

Events are an important way for wineries and regions to market their wines, but those are all being canceled.

“We had a great opportunity which we’ve been working on for two years now,” said Fred Chaudiere, spokesperson for the Ventoux AOC in France’s Rhône Valley. “Hospice du Rhônes is in Paso [Robles] at the end of April. We’re still hoping that it’s going to happen. The chances seem thinner. It was going to be a collective from the Ventoux area. We had a master class with Jeb Dunnuck and five winemakers plus some staff from the AOC. We’ve already sent 600 samples, for the seminars and the tastings and dinners. We’ve done a small movie for the seminar. It is more than a year of preparation that is jeopardized. I want to hope that it’s gonna happen. This is definitely a big deal for us. A lot of work and hopes taken out by the corona virus and the travel ban.”

The distribution of wine – normally a face-to-face business – is slowing rapidly.

“The retailers right now don’t want to meet with the distributors or the sales people,” Bousquet said. “The distributors don’t want to send their people to the retailers either. [Our distributor] Opici sent a memo that their people should not travel.”

© Consumer | Selling wine is hard enough when people aren’t trying to avoid each other, never mind in the midst of a global pandemic.

Doubling down on troubles

Some wine regions were already struggling with the 25 percent tariffs imposed by the US last year on French, German and Spanish wines under 14 percent alcohol. The coronavirus has made their business even worse, first by virtually eliminating the Chinese market.

“The impact on China is great and that is our number four market. We haven’t been able to send any wine to China for a while now,” Laure Vaissermann, communications director of Inter-Rhône, told Wine-Searcher. “The tariffs are really poisoning us in the US. Plus Brexit, which is another problem for the economy in the region. And now comes the virus in the US. So we don’t have the possibility to go to the US to see our partners. And trade people won’t be able to come to our place to visit, and write articles. All the usual means we had to promote our wines and to sell our wines are completely down now. We have to think about the B plan without knowing how long this will last. If we knew it would be for one month, we could work on it. But we don’t know.

“We need to ship wines. We need to sell wines and ship them. The international business has been very hampered by all these decisions.”

Domestic wineries are dealing with a dropoff in tasting-room visits. Many small US wineries depend on tasting-room and wine-club sales to survive.

Even if they are allowed to continue working themselves, wine producers may soon start running out of items they need to produce a case of wine, other than the wine itself.

“As of yesterday [the Italian government] closed any activity that is not strictly grocery, pharmacy or electrical stores,” said Alessandro Pasqua, VP of North America for Pasqua winery in Italy’s Veneto region. “The production of groceries, including agricultural businesses like wine, is continuing. But they can only have a certain amount of people in a specific room. They can only have a certain distance between people in the same room. They have to wear masks. They have to use protective procedures. Wine, being an alcoholic beverage is not affected by the coronavirus.”

But …

“At the moment, our supplier of cork in Sardinia island is slowing down,” Pasqua told Wine-Searcher. “And the glass provider which is making a specific bottle for the rosé wine, is not able to go to work. There are only so much dry goods you can store in your winery to do whatever you need to do.”

A light in the dark

After President Trump’s incoherent message to the nation on Wednesday night failed to reassure investors, the US stock market had its worst day Thursday in 33 years. This is not good for people in the retail goods industry.

“If business starts flowing again, we’re a strong company financially and we’ll be able to survive,” Dalla Terra Direct’s Ades said. “Smaller companies, if they’re not strong financially or they have significant debt, they’ll have a harder time.”

Let’s finish on a bright note. I spent much of the day speaking to longtime veterans of the wine industry for this article. From a distance, it could look apocalyptic, especially in the wake of the tariffs. (IMHO this would be an excellent time to suspend all our trade wars). But several people mentioned that by its very nature as a product that takes years to make, wine is a business where people tend to look into the future, to a time when this pandemic has passed.

“I’ve spoken with a lot of wineries in Italy,” Ades said. “They’re taking a pragmatic approach. We need to do this to stem the flow of the virus. We will be ahead of the rest of the world in the steps we’re taking. And they’re complying with them.”

Also, there’s this.

“People are going to be back with their family every day,” Bousquet said. “I think they’re going to need their fair share of wine and liquor.”