FOR YOUR INFORMATION
We share below a number of recent developments. As always, we rely on FIVS Members to apprise us of noteworthy matters. Please contact the FIVS Secretariat with items that may be of interest.
THE CORONAVIRUS REPORT
We express our sincerest sympathies to all of those and their families who have been struck by the coronavirus, as well as to the many who have been indirectly affected.
We would encourage you to visit the FIVS website and view the page on the coronavirus. We have developed this resource to inform those in the alcohol beverage sector on developments in such areas as trends, national support measures, and technical and sanitary matters.
Listed below are recent developments.
- The pandemic is changing the industry
- A shift to e-commerce: This piece discusses how alcohol beverage markets and companies are reacting to volatility, including the closure of retail establishments in many countries and increasing shifts to e-commerce. See also this article supporting the view that there will be an increasing move toward e-commerce in the alcohol beverage sector.
- The changes appears to be comprehensive: One wine industry executive, Richard Siddle, the editor-in-chief of The Buyer, opines on how the pandemic is affecting the wine industry and how wineries and restaurants are responding in the marketplace.
- The trends are changing: This article addresses how the coronavirus pandemic will change the wine world. The author considers how consumer trends are likely to shift: from a dramatic move towards off-premise sales to a new awareness and emphasis on local origin products.
- The sector is trying to help their communities
- The contributions of the alcohol beverage sector: Alcohol beverage sector producers and groups are supporting efforts to fight the coronavirus pandemic in numerous ways. This article by John Timothy, chief executive of The Portman Group, lists the numerous contributions made by alcohol beverage producers and trade associations.
- Some sectors are looking for help from the government
- Argentina – Wine sector requests governmental aid and guidance on alcohol sales: The Argentine Wine Corporation (Corporación Vitivinícola Argentina – COVIAR) has reportedly requested government aid after municipalities in nine provinces implemented bans on the circulation and sale of wine, ignoring the presidential decree 297/2020 that exempted the food industry from social, preventive, and compulsory isolation during the pandemic. Since the presidential decree exempted winemaking from activities closed due to the quarantine, the decree did not extend tax benefits and other reductions, which other sectors are receiving, to winemakers.
- Governments are seeking to support the alcohol sector during the pandemic
- Germany – Tax relief for the beer sector: To improve the liquidity of breweries and protect jobs during the pandemic, the Federal Ministry of Finance and the finance ministries of the federal states in Germany have agreed that deferral applications for payment of the beer tax may be made until 31 December 2020 for taxes already due or due at the main customs offices. The German Brewers Association reportedly responded by stressing the importance of breweries being able to use the deferral quickly and easily.
- Some governments are relaxing requirements
- Malaysia – Back in operation: Reversing an earlier decision, the government will now allow Heineken Malaysia Bhd and Carlsberg Brewery Malaysia Bhd to continue their operations during the movement control order period. Heineken had suspended the operation of its brewery in Petaling Jaya on 24 March, but obtained approval on 05 April from the Domestic Trade and Consumer Affairs Ministry to resume limited operations with a minimal number of essential workers during the pandemic.
- Mexico – Tequila makers continue to produce: Because the manufacture and sale of alcohol beverages has not been restricted in the United States and Canada during the pandemic, Mexican tequila makers reportedly expect 4 to 5 percent growth rates during the current year. While the production of alcohol beverages is not considered an essential economic activity in Mexico, the labor-intensive harvest of the agave plant has continued because agricultural production is considered essential.
- South Africa – Helping exports: The government has reportedly changed its policy and will now permit wine exports, as well as other fresh produce, to continue. This piece discusses the challenges for those exporting.
- South Korea – The government reportedly lifts its ban on online alcohol sales: Changes to the Liquor Tax Act reportedly came into effect in South Korea on 03 April, allowing retailers such as restaurants, supermarkets, and convenience stores to sell alcohol beverages via the internet and mobile apps. Customers must pick up their orders, however, because delivery is still banned.
- United States – Relaxing regulations: Many states have removed regulatory impediments so as to help alcohol beverage companies change their operations to meet new crisis-driven demands.
- …while other governments are continuing to restrict access or discourage drinking
- Australia – Continued restrictions: The Western Australian Government has reportedly decided to maintain its current restrictions on liquor sales for at least another month, despite efforts to bring them in line with national standards.
- United States – Prohibition? Pennsylvania’s Liquor Control Board announced on 16 March that all liquor stores would close the following day, hoping to keep residents at home, but instead the Board apparently triggered panic buying as sales spiked to $29.9 million on that single day. The Board reportedly began allowing limited online sales of spirits on 01 April, but began rationing access to online stores after orders apparently overwhelmed the site.
- United States – Advocating not to drink: The U.S. Surgeon General has reportedly advised Americans to “avoid alcohol” during the coronavirus pandemic. He was reported to say that, “All Americans need to avoid these substances at all times,” referring to alcohol, tobacco, and other products.
- There have been reported bans on the consumption of alcohol in countries such as Thailand and Botswana.
- Contrary to some reports, wine does not have a positive effect on COVID-19
- WIM’s Observation: Wine in Moderation (WIM) notes that contrary to some recently published articles, no scientific evidence exists that wine can have a positive effect on COVID-19. The organisation recommends that individuals follow governmental guidelines regarding the virus, such as staying at home.
- Illicit alcohol is causing even more deaths
- Dominican Republic – Illicit sales of alcohol: The Dominican Republic reportedly witnessed 24 deaths over the past week due to two types of illicit alcohol beverages.
- Iran – Deaths reportedly continue to climb from methanol poisoning: Approximately 3,000 Iranians reportedly have been hospitalised and more than 600 have died after drinking high-concentration alcohol, which they falsely believed could cure the coronavirus. Drinking alcohol is reportedly banned throughout the Islamic Republic, so those who drink must rely on bootleggers.
- South Africa – Illicit alcohol production: FIVS Member, The South African Liquor Brandowners Association (Salba) has reportedly expressed its concern about health risks posed by illicit manufacturers trying to fill the gap left by the inability of legal producers to sell alcohol due to the COVID-19 lockdown.