Wine after the pandemic? All the doubts in a glass
From Firenze University Press Journal: Bio-based and Applied Economics
Daniele Vergamini, University of Pisa: Dep. of Agriculture, Food and Environment
Fabio Bartolini, University of Pisa: Dep. of Agriculture, Food and Environment
Gianluca Brunori, University of Pisa: Dep. of Agriculture, Food and Environment
The Covid-19 Pandemic has triggered devastating consequences both for human lives and for economic progress. The most optimistic view of what we can expect after a long recovery from the COVID-19 epidemic will certainly be a half-full glass. The International Organization of Vine and Wine (OIV) sees in the near future a huge drop in wine consumption, as well as a reduction in average prices, and therefore in sales margins and turnover. While the Covid-19 pandemic has quickly delivered a global economic shock with catastrophic consequences, the increasing recessions in many
countries and related trade uncertainties are affecting the whole wine sector, from production to distribution, sales, and consumption. The pandemic and the set of measures adopted to contain it, have led to massive downturns in global economies, and to increasing disruptions to global supply chains, trade1 and tourism, which collapsed in the first half of 2020.
Export found increasing difficulties and limitations alongside widespread international border closures, uncoordinated policy restrictions and social distancing measures, trade policy uncertainties and turmoil in the financial market (World Bank 2020a). Symmetrically Imports have been curtailed by aggressive restrictions, which heavily weighed on consumption and investment (World Bank, 2020b). Sectors like wine that
rely heavily on export and tourism faced large declines that could jeopardies recent developments in most of the wine countries over the globe (Italy, France, Spain, Australia etc.). Many priorities on political agendas previously considered ambitious, especially those related to the post-2020 CAP reform that aim at securing those investments necessary to align agriculture with Sustainable Development Goals (SDGs) risk now to become even further out of reach (Pomarici and Sardone, 2020).
A huge question mark looms over the vast majority of emerging market and developing
economies, the growth for many sectors is still uncertain, and even worse scenarios are possible if after the immediate policy support the structure of the wine industry takes longer to recover.
The simple wage of this discussion paper is to provide a reflection on the effects of the COVID-19 epidemic for the wine sector. Distinguishing between short and long-term implications, we will try to analyze the impact of uncertainty that has spread since the earliest outbreaks of mid-March 2020 providing possible courses and outcomes. Clear policy actions and recommendations to alleviate the ongoing suffering of the sector are discussed, as well as addressing future challenges such as the recovery of the environmental investments through sustainable policies and the support of international trade through global coordination and cooperation.
The starting point of our reasoning adapts well to the Italian sector and other traditional wine countries (France, Spain, Portugal), after which some trends and policy implications that are specific to the sector can also be extended globally. Developing from a mixed-method participatory research process that integrates recent economic analyses (World Bank, 2020a; Vergamini et al., 2019) with diverse experience data, we offer a critical reflection made by researchers and stakeholders supporting several socio-economic narratives and policy implications in the light of the current crisis. Data have mainly collected as a part of a four-year EU-funded Horizon 2020 research project (SUFISA) and through a recent online workshop (May 15, 2020) promoted by the bachelor’s degree program in viticulture and enology of the University of Pisa. In compliance with privacy issues, to these data, we will refer in
the text with the initials WP (workshop participants).