UK – Wine, Culture & Society

The wine industry is not, of course, alone in the havoc Covid-19 has wreaked on it. All businesses (except maybe those producing face masks and – at least early on – toilet rolls) have suffered, and wine is low down to list of priority industries for the general health of the world. As I’ve noted in previous posts, enterprising producers have been working to find ways to get their wines direct to consumers – but the distribution industry generally has been thrown into turmoil by the crisis. Harpers – a UK wine trade magazine – ran an article suggesting that the wine economy would take five years to rebound from the chaos. Yet, as I’ve said in all my posts, the disease has not created new problems for the wine distributors; rather it has just accelerated the speed of changes already taking place. Further, these changes develop in the context of the specific cultures where wine is sold.

The hospitality sector is clearly going to contract. In some countries bars and restaurants are reopening, but social distancing means that they can accept fewer customers so their income will decline. In France I’ve already noticed a number of restaurants that have just failed to reopen as lockdown is ending. One issue here is the cultural insistence that meals only happen between midday and 2 p.m. and then after 7 p.m. at night. If they could bring themselves to accept that some people at least (if only summer tourists from other countries) would like the chance to eat a bit earlier, have a late lunch, or graze all day they might do more business. In other countries the decline of the town centre in the face of online shopping and rents that go up in the face of that decline has already been putting many restaurants out of business. Meanwhile, as Robert Joseph has noted, if work patterns change (at least in Western countries) so that more people work more often at home that may put further restaurants in the centre of major cities under pressure. Additionally, as the same perceptive critic notes, if there is a decline in restaurants, where consumers get to meet new wines introduced by sommeliers, what does that mean for producers in places such as Georgia, Sicily, or Carnuntum? The key question is – how is the on-trade for wine going to be recreated over the next decade?

Getting wine to consumers – particularly under the influence of Amazon and similar wine-focused organisations like Naked Wines – was already evolving, and this has now accelerated. In early June Amazon announced an ‘online wine store’ in Australia; meanwhile, according to Reuters Naked Wines has just stated that their June sales saw a 67% increase on the same month in 2019. Low overheads reduce costs (and thus the price of the wine) and rapid delivery increases consumer convenience. They may not squeeze out all the independent retailers but they could put pressure on larger suppliers (especially those who are already going online). Again, there are cultural issues at play. In Australia, as in much of Western Europe, online purchasing of wine is still really in early stages; however, in China, with the rise of behemoths like Alibaba, the population has already accustomed itself to making purchases online. Yet China itself is proving paradoxical here. Even before the disease hit there in January imports of wine in to the country were declining in both volume and value. According to one of my correspondents there, based on the General Administration of Customs of China the value of year on year imports of wine in to the country decreased in five of the last six months of the year. Why is this? No doubt the trade war with the USA has caused some price rises, and beyond that perhaps dissuading Chinese consumers from buy wines made by allies of the States. Perhaps there is a partisan move to drinking more of its home-produced wines (which are steadily improving in quality). However, what then followed –a year-on-year decline in import volume for the first three months of the year of 25.3% and in value of 31.1% just reinforced that. Subsequent political events will be doing nothing to reverse that process. Politics trumps the need for wine here.

I’ve always argued that the problem with selling wine online is that the physical interaction with the product (most obviously the taste and smell) limits how much it can be sold virtually; however, that is to ignore the fact that so many (especially younger) people now make their purchase decisions based not on taste but on recommendation by influencers and the online communities to which they belong. Meanwhile in the US online sales of alcohol doubled in the year to May and the UK showed a 50% growth over the same period. What is more, it seems that over the time since the crisis began consumers have been maintaining their move towards online alcohol shopping so it is probably likely to be continued when (if) the pandemic disappears.

Meanwhile, two countries present particularly interesting case studies about the effect of the crisis on wine distribution – both of them with an element of ‘prohibition’ in their cultural make up. In the wake of the end of prohibition in the USA in 1932 strict rules were introduced to manage how alcohol got to the consumer and (in part) to make it more expensive: this is the notorious three-tier system. In each state there must be one ‘importer’, a separate wholesaler, and a third retailer direct to the consumer. This gives big power to the large-scale distributors (who are reluctant to see the system change as it guarantees them an income but it is not popular with wine producers, who may not be able to sell wine directly interstate, nor with consumers who see three layers of distribution each taking their own cut (and thus pushing up prices) and who are limited in their ability to buy direct from producers. Additionally, those who seek new ways of getting wine to consumers (such as Amazon) may find the system works against them. A debate has developed on how the world of wine may change – but the power of the anti-alcohol lobby remains substantial, and is allied in this case to alcohol distributors with a vested interest in the status quo.

Finally, spare a thought for poor South African drinkers. As I noted before, in the early stages of the pandemic not just sales, but even the movement of alcohol was banned (thus essentially stopping exports). That was eased at the beginning of June – but the restrictions have just been reintroduced. This produced a brilliantly articulate groan of agony from one of the country’s leading wine journalists, Michael Fridjhon. While he acknowledges that wine causes all kinds of problems for some segments of the local population, notably more alienated groups with less access to power or wealth, all this is doing is stymieing that part of the nation’s economic recovery based on wine exports. Further, it is entirely undermining the attempts to rescue the hospitality sector. Fridjhon points out that the majority of the ANC’s leadership is officially in favour of prohibition (which has, of course, never succeeded in any other country). Additionally, I’d suggest, with wine specifically there is also the point that it was traditionally a white economic activity, and remains dominated by whites. Beyond that, as well, it is a business that is almost entirely based in the Western Cape– the one Province in South Africa which has a non-ANC government, and which the ruling party therefore detests as it threatens its monopoly on power. Politics beats wine again…

(Thanks to Cathy van Zyl MW, Neil Jing Zhang, and Paul McArdle for some leads which helped me develop this post).

Phylloxera began to spread through France in 1863 – and reached the furthest north around 1890 – so it took its time. One of the interesting things about its spread is that while it eventually ruined vineyards in every region, before it arrived most regions had a reason why it would not affect them. Soil, or variety or viticultural techniques: each place would be spared from what the others had endured – because they were, after all, special (thinking about it now, as an aside, I wonder if this played into the later development of notions about terroir? Hold that idea – perhaps we’ll return to it one day).

The spread of Covid-19 in the western world had me thinking about this more. The Chinese attempted to ignore it for a few weeks but – with the experience of SARS – when they took action it was severe and proactive. The same in South Korea. Yet when it arrived in Italy they took time, and ultimately only locked down a few provinces and regions (which in turn prompted an exodus of people, many crowded into trains whilst no doubt infected, to the south of the country). Thus it spread rapidly, and with devastating effect. Spain and France looked on but dilly-dallied. Certainly we had the sense here that our lockdown, strict as it was, should have come a week or ten days earlier, given what was happening in Italy and Iran. Boris Johnson should have seen this and acted sooner; and what can one say about the catastrophic shambles of federal leadership in the USA? In each case there was a sense – even if only unconscious – that ‘we are different, it won’t be quite so bad here we are more special than those who have already suffered’. I’m not claiming the Phylloxera was as bad as the current disease; it didn’t kill people. Yet the response was similar. And while Phylloxera killed no one it did reshape an entire industry. Hundreds of thousands of smallholders stopped producing wine, vast swathes of vineyard land disappeared (Champagne went from between 50,000 ha. and 80,000 ha. to the current 34,000) and what is now Algeria became for a while the main source of French wine. The fallout from the current crisis on markets and distribution, if not production could well produce changes that are as momentous.

There is another result of Covid-19 which is having an impact on the world of wine. The plague has shut borders. A viral mutation has managed to achieve what neither Brexit nor Donald Trump nor even Viktor Orban had attempted in order to keep foreigners out. ‘The foreigners are dangerous; the disease comes with them; and so, conversely, we need to focus on what our own country offers’. What are people drinking? Their local drink, so much safer, more hygienic that that ‘foreign muck’. OK – I’m exaggerating rather, but it’s interesting that some producers of English wine claim to be doing very well. Mark Harvey, of Chapel Down, says that ‘retail and online is flying’ – particularly the sparkling bacchus. Which makes sense, because bacchus (even if created originally in Germany) is the quintessential British grape variety. Are drinkers in times like this more likely to revert to drinking what their own country produces out of a sense of solidarity with their compatriots and a need to identify with the national fight against ‘the enemy’?

Having said that it maybe that only certain types of wine will sell, and in specific places. Another friend who works in the UK wine industry said that their premium fizz (pinot and chardonnay) is not moving so much – because it is the drink of celebration, and this is no time to celebrate. I always remember listening to Yves Dumont, former CEO of Champagne Laurent Perrier, when the 2008 financial crisis arrived. When there is a recession, the Anglo-Saxons refuse champagne – it is not appropriate in a time of crisis, when belts tighten and we should not be happy. The French, on the other hand reach for something which sparkles; it is necessary to cheer you up amid the gloom.

This pandemic and the lockdowns which have become widespread have certainly revealed different cultural attitudes to alcohol and wine. Today (4^th April) I received an email from a high-quality wine store in Dijon telling that me that next Saturday would be ‘happy Saturday’ with 20% off all wine. They are still open, and you can go there to buy what our government terms ‘purchases of première nécessité’ – essential products, which is what wine is after all! On the other hand, South Africa has banned all alcohol purchases during its lock down, which prompted the following observation from one commentator:

‘The South African government has effectively decided, without consultation, to wean its population off alcohol (and nicotine) cold turkey, a decision that could end up killing more people than the virus it hopes to mitigate. Unmanaged cessation of alcohol consumption can result in death, which is just one obvious shortfall. The other is that people will either end up brewing their own nuclear-powered mampoer, and/or illegal liquor sellers will take hold of the market.’

I’m uncertain how many will die from enforced abstinence – but as history suggests that the final prediction is inevitable. For those with large wine cellars, of course, it will have very little impact.

Western Australia also decided that the crisis was bad enough to introduce limits to the number of purchases people could make ‘to limit excess drinking’ – but their conclusion contrasts with the South African one. From the 25^th March the maximum you can buy is three bottles of wine a day! Hardly a restricted intake for one household – especially when you can add either a carton of beer or a litre of spirits to that.

Meanwhile, in some parts of the Southern Hemisphere it has been harvest. According to my friend Paul McArdle in Margaret River, cabernet is coming in as I write (where the main health concern was backpackers who pick grapes during the day then ignore all social distancing rules as they party at night). New Zealand, too, has been facing the dilemma of harvest during a state of emergency. The wine industry, like agriculture more generally, has a dispensation allowing it to work to harvest and process grapes, with protocols in place to ensure safe working environments. However, in Marlborough, where over three quarters of all of the country’s grapes are harvested, there has been something of a backlash. It seems that some local residents have complained that the harvest is threatening to increase disease transmission – which is a particular problem as the region has the highest proportion of over 65s in the country. It was reported that one doctor at the local hospital used Facebook to voice concerns, claiming that wine is a ‘luxury’ and that the harvest is ‘risking lives’.

What to do? Returning to the sparkling wine theme – I commend to you the words of a French poet-cum-diplomat in the 1930s: Gentlemen in the little moment that remains to us between the crisis and the catastrophe, we may as well drink a glass of champagne.’

This blog theme will be continued…

Tag: UK

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