A photo taken on May 28, 2020 in the Hofstaetter vineyards in Mazzone, Egna, Trentino-South Tyrol.
Italy's winemakers had a tough year facing floods, heat waves, and storms in 2019, and then the coronavirus pandemic came.
A strict ban in Italy and in most parts of Europe has stopped the demand for wine from restaurants and bars. Although life is normalizing again, industry experts predict a difficult year for Italian winegrowers.
"All in all, the near future is not looking too bright for Italian winegrowers at the moment," said Daniel Mettyear, research director at IWSR Drinks Market Analysis, to CNBC.
"Initially, the domestic market was very badly affected by the outbreak of the corona virus and the subsequent blocking period. Over 50% of the still wine consumption in Italy takes place in bars and restaurants, another up to 15% that takes place in smaller specialty shops and neighborhood shops everyone stayed closed during the heavy lockout period. "
Italy is the best wine producing country in the world. And like other top producers, wine production fell in the year before the pandemic. In 2019, production in the country decreased 15% compared to the previous year.
According to estimates by the International Organization for Wine and Wine, global wine production in 2019 had decreased by 10% year-on-year to 258 to 267 million hectoliters and, following an "exceptionally high wine production, was back to the average level of the past years volume in 2018."
According to the OIV, the 2019 declines for Italy, Spain and France (the three countries account for 80% of the EU's wine production) were mainly due to adverse weather conditions, especially a very cold and rainy spring, followed by an extremely hot and dry summer.
Now, after the coronavirus crisis, winegrowers are expected to be more severely affected, especially in Italy, the epicenter of the outbreak, before it spread across the European continent.
The IWSR forecasts that Italian still wine volume will decrease by 9.54% and Italian sparkling wine volume by 16.86% in 2020, due to high double-digit declines in most key markets.
Although domestic alcohol consumption increased during the crisis, "any growth in supermarket consumption will not make up for losses elsewhere in the market," the IWSR noted, adding that the prospects for wine exporters worldwide are now mixed for 2020 .
"While some key markets such as the USA and Canada expect relatively weak declines in exports and some even expect growth (still wine in Sweden and sparkling wine in France, Australia and Mexico), a significant decline can be expected overall The impact of the pandemic, the blockade and the future economic impact will and will significantly dampen wine demand, "said IWSR Mettyear.