Page 15 - bne magazine September 2020 russia melting

bne September 2020 Companies & Markets I 15
North Macedonia’s wine industry faces huge losses due to coronavirus-related fall in sales
Valentina Dimitrievska in Skopje
North Macedonia’s wine industry is suffering huge losses due to the drastic fall in demand after the lockdown imposed over the coronavirus (COVID-19) epidemic, local media reported.
The wine sector generates almost €50mn in exports annually and provides work for approximately 30,000 individual farms, 12,000 seasonal workers and more than 2,500 employees in 74 registered wineries. Wine is the second largest agricultural export after tobacco with annual export of around 120mn litres.
This year, sales of wine fell by up to 80% due to reduced
sales in hotels, bars and restaurants, which are the biggest consumers of bottled wine, Makfax reported, citing data from Wines of Macedonia, an organisation that gathers the biggest wine producers in the country.
In addition, attempts by major wine producers in Italy, Spain and France to clear out large reserves of wine caused a drop of wine prices in key export markets by more than 40%, which created additional pressure to reduce the price of Macedonian wine aimed for exports.
Reuters reported that Italy and France, which are the leading wine producers, plan to cut premium wine production to prevent the fall in prices after the coronavirus pandemic lowered sales and led to huge reserves.
The drastic fall of wine sales on the domestic market in North Macedonia and the reduction of wine prices in export markets
caused the financial stability and liquidity of the Macedonian wineries to seriously deteriorate.
To avoid a total collapse of the sector, the wineries’ owners are seeking direct support from the government to be able to purchase the entire quantity of grapes from this year's harvest at defined prices.
In the period from March to July, representatives of Wines
of Macedonia initiated several meetings with the competent institutions, at which a specific set of measures was presented, but the interim government has not made a decision on the issue yet.
The reason could be that the wine industry was not a priority in the initial sets of measures taken by the government to mitigate the effects of the coronavirus crisis. On July 15, North Macedonia held snap elections but it is still functioning with an interim government, which has no authority to take major decisions.
Wines of Macedonia was established to support the development of the wine industry, viticulture and wine tourism in the country, as well as to offer solutions to overcome challenges in wine sales.
“This year, sales of wine fell by up to 80% due to reduced sales in hotels, bars and restaurants, which are the biggest consumers of bottled wine”
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