Coronavirus and China's wine market

The outbreak of coronavirus has already impacted the Chinese economy. Jim Boyce considers its effect on the wine trade.

Photo by YIYUN GE on Unsplash
Photo by YIYUN GE on Unsplash

The new coronavirus spreading throughout China, and the world, has resulted in quarantined cities, travel restrictions and delayed returns to work and school from Chinese New Year holidays. Not surprisingly, this has also been bad for the wine trade.

"I think it will heavily impact us and many other restaurants and bars. I think in general people will be afraid to go out," says Isabella Ko, owner of wine bar The Merchants in Beijing. A wealth of online photos of empty streets and shops underscores her point. But Ko does see one bright silver lining: the potential for boosting retail sales of unique wines.

"A lot of people these days feel 'life is short, we need to enjoy it now’," says Ko.

Most people contacted for this story say they will shift more focus to online retail, too.

"The key change is we will put more effort into home delivery services," says Campbell Thompson, co-owner of importer The Wine Republic. He says the hard part is actually getting the wine to consumers from the company’s warehouses in Beijing, Shanghai, Shenzhen and Chengdu.

Case in point, Claudia Masueger, who says virtually all recent sales from her 60-shop CHEERS wine chain have been O2O (online to offline) via her app on social media platform WeChat or third-party platforms like Erleme.

"But how many guys will be in Beijing to deliver that wine?" she asks of the migrants who make up the vast majority of the drivers but, due to the holidays, are spread across a nation that is increasingly locked down.

"I don't know how to run a business without people," says Masueger. She says that even when her employees do return to Beijing, they will be self-quarantined at home for seven days to ensure they are not infected.

Travel issues aren't limited to those in China. They are also set to upset events such as tastings and dinners, led by visiting wine KOLs, that already seemed a dubious draw given the current climate.

"All events such as wine dinners are cancelled. All supplier visits in February are also cancelled," says Alberto Fernandez, the managing partner of Torres China,

Some even wonder if the virus crisis might have a major impact on Tang Jiu Hui, the China Food & Drinks Fair that is only eight weeks away. It’s the country’s biggest fair and considered a must-go for many.

"We are already considering to cancel our presence at Tang Jiu Hui,” says Fernandez.

He’ll have lots of time to think about it. Torres’ office is in a complex run by a state-owned company that, due to concerns about coronavirus, informed him today that it won’t reopen until February 10. Like many others in the trade, he'll have to make other plans.

Jim Boyce

 

For full access...

Please log in or register now»               No subscription?  Try out our free 14 day trial»

Latest Articles