The European Union Announces “Exceptional Support Measures” for Wine Sector

The Commission adopted yesterday an additional package of exceptional measures to support the wine sector, following the coronavirus crisis and its consequences on the sector. The wine sector is among the hardest hit agri-food sectors, due to rapid changes in demand and the closure of restaurants and bars across the EU, which was not compensated by home consumption.

These new measures include the temporary authorization for operators to self-organize market measures, the increase of the European Union’s contribution for wine national support programs, and the introduction of advance payments for crisis distillation and storage.

Janusz Wojciechowski, Agriculture and Rural Development Commissioner states:“The wine sector has been among the sectors hit hardest by the coronavirus crisis and the related lockdown measures taken across the EU. The first package of market-specific measures adopted by the Commission has already provided significant support. Nonetheless, the uncertainties surrounding the scale of the crisis at EU and global level, and a close monitoring of the market has led us to propose a new package of measures for the wine sector. I am confident that these measures will provide rapidly concrete results for the EU wine sector and soon provide stability.”

The Exceptional Measures include:

  • Temporary derogation from the European Union’s competition rules: Article 222 of the Common Markets Organisation Regulation (CMO) allows the Commission to adopt temporary derogations from certain EU competition rules in situations of severe market imbalances. The Commission has now adopted such a derogation for the wine sector, allowing operators to self-organize and implement market measures at their level to stabilize their sector and in the respect of the functioning of the internal market for a maximum period of 6 months. For example, they will be allowed to plan joint promotion activities, to organize storage by private operators and to commonly plan production;
  • Increase of the European Union’s contribution: the European Union’s contribution for all measures of the national support programs will increase by 10% and reach 70%. A previous exceptional measure had already increased it from 50% to 60%. This will provide financial relief to beneficiaries;
  • Advanced payments for crisis distillation and storage: the Commission will allow Member States to provide advanced payments to operators for on-going distillation and crisis storage operations. These advances can cover up to 100% of costs and will allow Member States to fully utilize their national support program funds for this year.These measures complement the recently adopted package, which benefited the wine sector through the flexibility provided under market support programs. This included for instance an increased flexibility of tools to control production potential, the so-called green harvesting tool, and the possibility to include temporary new measures such as the opening of distillation of wine in case of crisis or an aid to crisis storage of wine.

In addition, the Commission also launched two calls for proposals for promotion that aim to support the sectors most affected by the crisis, including the wine sector. The two calls will be opened until 27 August 2020.
The commission said it is the first time that it has issued such calls. One call relates to ‘simple programs’, which can be submitted by one or more companies from the same EU country. The other relates to ‘multi programs’, which can be submitted by at least two companies from at least two EU member states, or by one or more European organizations. Janusz Wojciechowski, states that the first package of support measures had “already provided significant support”.

Champagne popping out of Covid-19 – Liz Palmer’s Presentation – Sparkling WINE Week July 1 2020

Sparkling WINE Week – July 1st 2020
Champagne Post COVID –
Session 3 – 15.30 – 16.00 Seminar: Champagne popping out of COVID-19  – Sparkling WINE Week Liz Palmer, Key Note Speaker

 Champagne Popping Out Of Covid-19

 Remember …only sparkling wine, from the Champagne region of France, can be called “Champagne”.

Brief Overview Of The Region

Location: the Champagne Region is located in the Northeastern part of France, about 1h30 from Paris by car and 45 minutes by TGV (high-speed train).

 Districts: The viticultural boundaries of Champagne are legally defined and split into 5 wine-producing districts: Aube, Côte des Blancs, Côte de Sézanne, Montagne de Reims, and Vallée de la Marne. The towns of Reims and Épernay are the commercial centers of the area. Reims is famous for its cathedral, Notre-Dame de Reims – this was previously used for the coronation of the French Kings and a UNESCO World Heritage Site.

Grapes: Three grapes are mainly used – Pinot Noir, Chardonnay and Meunier.

Other approved varietals include: Pinot Blanc, Pinot Gris, Arbane, and Petit Meslier

  • These together are less than 0.3% of plantings.

31% of vineyards in Champagne are planted with Chardonnay which performs best on the Côtes des Blancs and on the chalk-slopes south of Epernay. Chardonnay produces lighter, fresher wines and gives finesse, fruit and elegance to the final blend. It is the sole grape used in Blancs de Blancs.  Note:  No other authorized white grapes, i.e., Pinot Blanc, Arbane, Petit-Meslier and Pinot Gris can be used in making a Blancs de Blancs.

Pinot Noir accounts for nearly 38% of the plantings in Champagne and lies at the heart of most blends – it gives Champagne its body, structure, strength and grip. It is planted across Champagne and in the Aube district.

The final varietal is Meunier which accounts for nearly 31% of the plantings. This varietal is durable and resistant to spring frosts – found in Marne Valley. It produces a soft, fruity style of wine that is ideal for blending with the more assertive flavours of Pinot Noir. Producers allege that Pinot Meunier lacks aging potential, but this does not deter Krug from including 15% of it in their final blends.

Champagne is a collective of over 16,000 growers and 340 houses. The region as a whole has put a proactive focus on climate change and sustainability since 2003 it was the first in the world to produce a carbon footprint assessment and identify the main sources of emissions in their systems. Based on learnings from the assessment, the region rolled out a plan to cut emissions by 75% by 2050. A nearer-term goal ensures that 100% of the area holds an environmental certification by 2030. (As of 2019, about a fifth of the region held a certification.)

Champagne Shipments

The latest shipment figures are attached [as at April 20, 2020] « too early to tell the effects » since 50% of the shipments occur between September – December 2019, the next figures are expected to be announced around the 10th/15th of July – so watch for this – usually published in French.

Going back to 2019 – Champagne reached its highest ever turnover, breaking the €5 billion mark for the first time in its history, while the start of this year was also very strong in terms of sales of the sparkling wine. The beginning of 2020 was good in terms of consumption – and now it’s a different story.

2020 Pandemic 

With gatherings over the past three months across large parts of Europe, and around the world, canceled or postponed, and bars and restaurants closed, it should come as little surprise that Champagne sales would be seriously affected, especially as the nation’s worst-hit by the pandemic are some of Champagne’s biggest markets: France, Italy, Spain, and the USA.

As a whole, the Champagne region immediately reacted when the W.H.O. declared a global health emergency with the coronavirus pandemic [January 30, 2020].  France announced the first coronavirus death in Europe [February 14, 2020].

What Initial Steps Were Taken? 

  • Adapted general safety measures in the vineyards and cellars, and made the continuation of the work possible.
  • established guidelines for « mating confusion » which usually is done by hand in large groups (the whole village at once).

What is mating confusion:  This technique is based on a natural insect (scent or aroma) pheromone which confuses a male butterfly into not mating with the female. If the insects don’t breed, they aren’t a threat to the vines – this is called sexual confusion.

Mating confusion was postponed a few times and eventually suspended and did not take place in many villages. Typically, the growers would rather take the risk to lose a percentage of their grapes to the insects, than giving up on a « biocontrol  – which is a component of an integrated pest management strategy. It is defined as the reduction of pest populations by natural enemies.

[Note: Champagne is the leading European country, in terms of surface, when it comes to mating confusion and half of their surfaces are under mating confusion].

  • During this time, the Comite Champagne reminded the growers and houses, of the strategic orientations of the region: growth in value rather than in volume.
  • During the crisis, the Champagne Region interacted with the French government, to ensure that economic measures were in place to support the domaines and wineries.
  • The Presidents and executive board members of the houses have clearly communicated that Champagne expects a fall of shipments by 100 million bottles (i.e. minus 30% to minus 35%) over the year, resulting in a loss of turnover of 1,7 Bn€.
  • During the months of April and May, Champagne has managed to establish an “adaptation” of the collective system which is aimed at ensuring the survival of the houses and companies, such as:The 2020 harvest will be bottled in two parts:

the first part, as usual, January 1st 2021;

with the second part to be bottled as of January 1st 2022

(ensuring that there is a reasonable level of production in 2020 (in order to sustain domaines and all players, who depend on selling grapes). This avoids providing the markets with too much wine.).

[Note: Currently there are almost 4 years of shipments in stock (or 1,43 Bn bottles)]

  • The French government was solicited to reinforce the “Loi EGalim” or “**EGalim Law”] in the French off-trade, because it has had, in the past, positive effects on the Champagne market overall by limiting extreme discounts.

**[in long form this represents – law for the balance of trade relations in the agricultural and food sector and healthy, sustainable, and accessible food for all].

  • The EGalim Law set recent promotions as follows: 1 bottle offered for 3 purchased, as opposed to « buy one get one free ».

[Note: This call to the government is a positive sign on Champagne being firm on its value growth strategy.] 

Increased Digital Activities

  • The growers, houses and the Comite Champagne have all changed the way they communicate including increasing their social media activities.
  • recently launched Champagne education platform [Mook] champagne-mooc.com.

Classic Version

Course in English with subtitled videos

Access to 4 educational modules

The Champagne making process

The Champagne terroir

History and Economy of Champagne

Diversity and Tasting

Free

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Premium Version

Course in English with subtitled videos

Access to the 4 educational modules of the classic version

Additionnal contents:

Extra videos

Test your knowledge

Get the official Statement of completion

49€ (taxes included)

Strategy – Post-COVID

  • The main driver to rebuild a « desire for Champagne » is to collectively build the visibility of Champagne as a region that has invested in an eco-friendly production management [this is a number one concern for consumers 25-35 years in many key markets] and Champagne as the drink for celebrations, and special moments, but also the drink to make moments special — Champagne as a treat during hard times, a break within the rush, a comforting drink, for some.
  • And as Louis Roederer’s cellar master Jean-Baptiste Lecaillon states “We make something which is not essential but, at the same time, it is essential for pleasure and bringing people together. We make a wine for celebration, so we decided that, in difficult times, it is important to do what we do and try and make an even better wine for the future.”
  • Some brands, including the Union of Growers have organized charities to support medical teams in the region.
  • The environmental effort of the region (previously mentioned), for the last 20 years and with objectives set for 2025, 2030, 2050, these strategic fundamentals are long-term.

Harvest 2020 

  • There was initially a challenge to get seasonal workers for the upcoming harvest above at least 50% of the 120,000 required. With most coming from Eastern Europe, it’s both a challenge to determine how and when they can travel to France, and then to implement social distancing which anticipated for the end of August. This is no longer an issue as the UE will be reopening and students will be available.  The challenge remains to implement social distancing.
  • This is a manual and collective task that can cause incredible logistic challenges (transportation and meals).

Champagne Tourism

  • When it comes to tourism the region has adapted the government guidelines to reopen and the sites have just started to open.

France is Europe’s most-visited country, making tourism a key pillar of the economy.

  • Experts say it’s too early to evaluate the full effect of the COVID-19 crisis, but the European Commission is already calling for a new “Marshall Plan,” using EU funds, to save the tourism industry.
  • Once the lockdowns are fully over, and plans for a vaccine are in place, we will all want to celebrate – with Champagne of course!

Sources:

Comite Champagne
Thibaut Le Mailloux
Jean-Baptiste Lecaillon

 

 

Liz Palmer

liz@liz-palmer

www.liz-palmer.com

FIJEV Talks June 24, 2020: Wine Tourism / FIJEV Table Ronde – Oenotourisme

I’m honored to be part of FIJEV Talks: Wine Tourism / FIJEV Table Ronde – Oenotourisme on Thursday, June 25th, 2020- 06.00 pm Rome/Paris time, 7pm Beirut time. I will be joining three other international guest speakers who will focus on actual and future challenges for global wine tourism.

Wolfgang Junglas, President of FIJEV will moderate the talk

Speakers will be:
* Liz Palmer (FIJEV) – Canada
* Nathalie Touma (Wine Producer) – Lebanon
* Alejandro Paadín (FIJEV) – Spain
* Filippo Magnani Filippo Magnani (FIJEV) – Italy

#wine #winetalks #winetourism #ChateauStThomasWinery #ChateauStThomas #oenotourism #WomenInWine

https://lnkd.in/gpKez_d

Stay tuned for a followup report on our talk!

Southern French Wine Regions Announce €34M Recovery Plan

At a press conference May 29, members of the southern French wine industry agreed on a comprehensive plan which will aid the sector following the coronavirus disruption.

The “unprecedented” scheme aims to safeguard jobs, boost sales and help the region and its wine producers regain market share over the next 18 months.

Furthermore, it intends to help companies develop multi-year trading partnerships, increase the rate of premiumization in the wines, and safeguard the production of the region’s distinctive dessert wines (vins doux naturels).

The scheme has the backing of the regional council, regional business and marketing boards, wine industry trade unions, the regional Chamber of Agriculture and wine trade bodies including Inter Oc (Interprofessional Council of wines from the Pays d’Oc), IVSO (Interprofessional Council of Wines from the South West of France), CIVL (Interprofessional Council of  Languedoc Wines), CIVR (Interprofessional Council of Roussillon Wines) and the Gardoise, part of Inter Rhône.

A total of €14 (€7m each) will be coming from the Regional Council of Occitanie and business and marketing boards.

Support will be given to companies to assist them with their marketing expenses, including participating in trade fairs, while €0.5m will also be allocated towards a campaign promoting the region’s wines. 80% of the budget (the €14m) will take the form of direct aid for businesses.

A further €20m will come from wine trade bodies. Inter Oc is contributing €14m, while the CIVL, CIVR and IVSO are each giving €2m to the cause.

The recovery plan will be presented to the vote of regional elected representatives in July.

Languedoc winemaker, Gérard Bertrand, said: “The region and all the players in the Occitanie wine sector have come together and mobilized to collectively build a stimulus plan of unprecedented scale in France with regards to the resources that have been contributed.

“With direct aid for wine companies, in particular for marketing, collective actions and promotion, we are ready to act on all fronts: to secure jobs, promote local development of activities and stimulate the reconquest of markets in France and internationally.”

In addition to national government schemes, the region has been supported by a number of measures during the Covid-19 crisis. Wine firms have been able to take advantage of the Fonds de Solidarité Régional (Regional Solidary Funds) which gives aid to businesses who have not had access to a state-guaranteed loan (PGE). Companies have also been given extensions, postponements or exemptions from loan repayments. In addition, the Solidarité Alimentation Occitanie, launched in March, has helped promote local deliveries in order to for the economic activity in the region to be maintained.

Occitanie is the administrative region formed in 2016 from the merger of the Languedoc-Roussillon and Midi-Pyrénées regions

It comprises over 270,000ha, producing 14m hectolitres of wine, and boasts 93 appellations including 59 PDOs. It is viticulturally diverse, with some 150 native and international grape varieties grown. Around 22,600 wine-related companies operate in the region – employing 100,000 people – with a turnover of €1.3 billion. Wine grapes represent 20% of agricultural production in the region (in 2017) and wine worth €925m was exported in 2018.

Sources:  Drinks Business and the Regional Council of Occitanie

 

Wines of Argentina appoints Maximiliano Hernández Toso as new president

The Wines of Argentina has recently appointed Maximiliano Hernández Toso as its new president for the next two-year period.

Toso will serve a two-year term as president, supported by Guillermo Barzi, who will continue as acting vice president of the institution.

Tosco was appointed during an Ordinary General Assembly of Wines of Argentina yesterday, held over videoconference.

Hernández Toso is the co-founder and director of WHT Partners, an Argentine venture group that invests in high-end wine and owns Riglos and Huarpe wineries. He has been on Wines of Argentina’s board of directors since 2015, and previously occupying the role of treasurer.

He has an MBA from IDEA and the London Business School and a Master’s in public policy from Carnegie Mellon University, where he studied as a Fulbright fellow. Toso has also taught and directed the wine management programme at ADEN Business School and has also spent time working as a private and independent consultant to entrepreneurs, investors and multi-lateral organizations.

Commenting on his new role, Hernández Toso said: “It is a privilege for me to lead this institution, which I respect and admire for the great work it has done since its inception. We have many challenges ahead, but also great opportunities to innovate and continue bringing Vino Argentino closer to the world and raising the perception of Argentina as a modern winemaking country thanks to the enormous wealth and diversity of our terroirs.”

Vice president Guillermo Barzi, added: “Over the years, Argentina has shown that it is capable of surprising and competing internationally with great wines of the world. The goal is challenging, but we will keep the focus on collaboration agreements and education as a way to reach new audiences.”

Wines of Argentina website:  https://www.winesofargentina.org/en