It should have been a great year for Spanish wine: a bumper crop of grapes resulting in millions and millions of extra bottles for sipping or swilling at home and abroad.
But with Covid-19 leading to a catastrophic drop in wine sales, the Spanish government is offering growers subsidies to destroy part of this year’s record grape harvest.
Faced with over-production in a shrinking market, €90m is to be spent either on destruction or on the distilling of grapes into brandy and industrial alcohol. Lower limits have also been set on the amount of wine that can be produced per hectare – and have already been imposed on makers of cava, Rueda and Rioja.
This year’s grape harvest is expected to produce 43 million hectolitres of wine, compared with 37 million in recent years. Even without Covid, this exceeds the combined domestic and international demand of 31 million hectolitres, but, to make matters worse, restaurant sales have fallen by 65% and exports by 49% since the start of the pandemic.
Wine growers’ associations say the government measures are insufficient, and that some of the larger wine houses are using the Covid crisis to renegotiate contracts at lower rates.
“The worst thing about this is that within a month we’ll be harvesting an abundant harvest at rock bottom prices and, if no measures are taken, wine sales are going to deteriorate,” said Fernando Villena, president of the Asaja farmers’ union in Castilla-La Mancha, central Spain.
Carlos Bonilla of Bodegas Campos Reales, who is president of the La Mancha regional denomination, accounting for around half of Spain’s production, said: “World wine consumption is down 10%. Meanwhile we are producing more wine per hectare so unless consumption goes up, we will have to regulate production.”
The government had approved only about 10% of claims for the green grape harvest, the term for destroying crops, he added. Smallholdings were most likely to be eligible for the payment. “These people produce good- quality grapes, which is what we as wine-makers want.”
During the lockdown, when borders were closed, fruit was left to rot because most pickers come from Romania and North Africa. However, Bonilla expects migrant labourers now in the region for the garlic harvest will stay on to pick grapes. “The risk is infection,” he said. “These are people who have no fixed address and whose priority is to make a living, so they are difficult to control.”
But some wine-growing regions, such as the Rías Baixas in Galicia, in the north-west, say they are having difficulty recruiting grape pickers as people fear exposure to Covid-19 or jeopardising their furlough payments.
In the cava-producing region of Penedès, in Catalonia, it’s a different story: the worst mildew attack in 30 years has devastated many vineyards.
“Some people have lost their entire crop,” said Gerard Jané of the bodega Jané Ventura. “The cava producers Juve i Camps have lost two-thirds of their vines. So here we might have a harvest maybe 20% smaller than normal.”
Around 80% of the production in Penedès is given over to cava and, as with French champagne, sales have slumped as people have had little to celebrate.
“It’s very unpredictable, because we don’t know how things are going to turn out,” said Jané. “But we’re looking at around 80% less demand than in a normal year.”
France’s champagne industry faces a similar crisis, with sales down by a third and losses of €1.7bn. The industry proposes imposing a tight cap on production, with surplus grapes destroyed, so as not to flood the market. Smaller producers are already saying the cap will be ruinous.
“Of course I’m worried, but we shouldn’t be pessimistic,” said Bonilla. “I’m always optimistic because there will always be solutions, just as there will always be problems.”