Allegrini 2018

Coronavirus: an uproar in the wine, tourism and food economy

U.S. airlines cancel flights to Italy, events and appointments are cancelled, the policy gives partial answers, there is a risk of a huge bill
The effects of the coronavirus on the economy

The emergency linked to the epidemic of the Covid-19 virus, which from China has arrived in every corner of the world, starting from Italy, to quickly reach the whole of Europe, from France to Germany, from Spain to Great Britain, forces Governments and the economy make quick decisions, which bring with them real reversals even in a few hours. It happened at ProWein, the largest trade fair dedicated to the wine business in the world, which, after confirming the dates of just six days ago (15-17 March), following the guidelines of the German Ministry of Health after the first outbreaks not far from Dusseldorf, had no choice but to postpone the event until a date to be set. The dates of Vinitaly (19-22 April), confirmed by Veronafiere in recent days, resist - at least for now. But the situation is constantly evolving, and certain dynamics will have an impact also on the world of wine. Meanwhile, it can return to add two events to the calendar: the Vinexpo in Hong Kong, as we had anticipated, will be officially held in July, from 8 to 10 July (it was scheduled from 26 to 28 May), while ProWine Asia Singapore - also postponed from March 31 / April 3 - will be staged a few days later, from 13 to 16 July.
The first consequence, rather sensational, is that the US State Department has raised to level 4 - the highest - the dangerousness of the Regions at the centre of the outbreaks in Italy, strongly recommending not to travel to Veneto and Lombardy, imposing medical checks for those who make the opposite route, from Italy to the United States. It is not a ban - as is the case, instead, for passengers arriving from China - but a “Travel Advisory”, which will be more than enough to cancel arrivals, made even more difficult by the American Airlines decision to suspend flights from New York and Miami to Milan until April 24, followed by the Delta, which will reopen the connections on May 1. Even more clear is the closure of Israel and Turkey, which have canceled all flights to and from Italy, with many other countries - from Jamaica to Jordan - which have barred entry to those who have been to Italy in the last 14 days, with China still isolated, although in several regions it is returning to normal.
Fear and isolation that risk dragging the Italian economy to the bottom: tourism is worth 5% of GDP, namely 90 billion euros, and directly or indirectly employs 3.5 million people. As mentioned by the economic journalist Vittorio Malagutti on “L’Espresso”, the many cancellations for the summer season are worrying: if the infection ran out in the coming weeks there would be time to recover, but “a lot also depends on the image transmitted abroad of a country brought to its knees by contagion. An image that at least for the moment does not correspond to reality. This is enough, however, to convince potential tourists to make their way to other more welcoming lidos”.
The problem - as mentioned - also applies in the opposite direction: the “Great Wines of Italy”, the great tasting of the best Italian labels, organized by the critic James Suckling, for example, will be staged in New York, as expected, on March 4, but without Italian producers: “in light of the latest travel restrictions in Italy - says the email sent to the producers from Suckling - the venue of the event, IAC New York City, they insisted so that all exhibitors for the “Great Wines of Italy” were represented by a local person (who lives permanently in the United States) for the event (...). Italian wines must be promoted in New York at this particular moment.”
World markets had not experienced such uncertainty for decades, and for wine, which makes more than half of its turnover abroad - 6.4 billion euros in 2019 - the moment is delicate, as they said, between hope and concern, producers, entrepreneurs and globetrotting managers of wine, heard in recent days by WineNews. Pio Boffa, at the helm of the historic Pio Cesare, the Barolo brand, had already warned - even before it was postponed - on the potential flop of ProWein, where “all the appointments with the English, Americans and so on, have all been cacelled. In the last few days, I have been to France and Germany, where the press has received the message that we Italians first sent, and it is a disaster. Not to mention southeast Asia, beyond China: it was the only area in the world where we could think of growth in our business, but now everything is stopped”. Similar words those of Marilisa Allegrini, at the helm of the historic Amarone Della Valpolicella company: “we did not need this, we are not already particularly well-positioned as an economy in general, beyond wine, without growth, and this is a very strong blow. What I hope is that there are governmental and European measures that will help us, for example on the CAP front. Appointments are skipping, restaurants are empty, people are not traveling, it means that we will concentrate for a bit more on the local market. I am convinced that everything will be resolved, but 2020 will certainly be a difficult year”.
“Objectively everything is evolving, it is difficult to make predictions - comments Renzo Cotarella, managing director of Marchesi Antinori, the most important private estate of Italian wine - many indicators, such as the seasonality of the influences, say that this will still be a crisis that will pass. It depends on how long it will last, and it is clear that there are problems, but a situation like this for one or two months cannot bring a sector like that of wine to its knees. “ As Michele Bernetti, at the helm of Umani Ronchi, tells from the Marche, "there is concern about a long wave that could last for a while, there are appointments that jump and new ones are not taking place for now.” For Antonio Rallo, at the helm of the Sicilian Donnafugata, “the situation is schizophrenic, as is our society in these phases. We have empty shelves because there is a hurry to stock up, fortunately partly also for wine, while on the outside there is a noticeable slowdown, even in the South. We are suffering in Asia of course, which is the epicenter of everything”. Instead, use less somber tones, Tancredi Biondi Santi, working in the States for the Castello di Montepò family business: “this escalation to chase the exasperation of the news in the US is not there and neither have I found negative effects on the public opinion. In America I worked very well, meeting many operators who love Italy of quality wine and cheer for us. The effects of this bizarre communication must be mitigated.”
The effects on the world of wine, however, are only part of the damage that the current situation will generate on the agricultural and agri-food economy of the Belpaese, so much so that the Ministry of Agricultural Policies led by Teresa Bellanova has launched a decree in the Council of Ministers with the “first urgent measures to support companies in the agri-food sector and to combat any form of unfair competition and practice that will be rapidly expanded and strengthened with the next measures” as explained by the Minister. In the field, measures to guarantee liquidity for agricultural businesses to pay off bank debts through zero-rate mortgages; protection of the made in Italy agri-food in the world with the introduction of sanctions against unfair commercial practices that affect our companies and our products, damaging their reputation; support for workers in the agricultural sector with the redundancy fund; support for farms that carry out agritourism activities with the suspension of all contributions, social security payments and premiums for compulsory insurance.
On the other hand, those who complain of a certain lack of attention from the Government are the Fipe - Italian Federation of Public Exercises, which stresses that “from the first drafts circulating of the Decree for urgent measures to support businesses, the Government ignores the existence of a sector, that of administration, which has lost 80% of its turnover also due to the communication follies of these days. Italian catering and entertainment companies, considered by all over the world to be the pride of Italian hospitality, are instead transparent in the eyes of the Government and the Italian legislator. Not a single line nor a provision to support companies in this sector, which had been the driving force for tourism and the Italian economy, are present in the government decree. The public businesses (bars, restaurants, pizzerias, entertainment venues and banqueting companies) are the ones that more than any other sector have paid for the communication follies of these days and today are repaid with absolute silence”.

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