Italiano
UK wine market between coronavirus and “no deal” Brexit
With a value in excess of EUR 3.4 billion, the UK is our fourth largest export market for agri-food products, of which EUR 770 million is related to wine. What risks for the future?
According to a recent Nomisma Wine Monitor survey, during the lockdown, 3 out of 10 UK consumers said they consumed less Italian wine than in the pre-quarantine period, compared to 53% who did not change their purchasing preferences. One of the main reasons for this reduction is the closure of restaurants, in a country where out-of-home consumption accounts for 45% of the total value of food consumption (in Italy the incidence is 35%). And while waiting for the end of the lockdown - scheduled only for June 1 due to the continuous growth of contagions - the spectre of the "no deal" is increasingly threatening the Brexit negotiations.
The United Kingdom ranks sixth on the world food import scene with more than €58 billion of imported products in 2019, and second in wine purchases (just under €4 billion). Compared to this trade, Italy is an important partner; last year, compared to 3.4 billion of agro-food products exported from Italy to Great Britain, almost a quarter involved wine, making Italy the second largest supplier after France.
As is well known, the British love sparkling wine so much that, in just five years, they have increased imports of Italian "bubbles" (primarily Prosecco) from 59 to 96 million litres (more or less 128 million bottles). But wine is not the only product made in Italy to delight the palate of the English. The United Kingdom is in fact the second destination market for our tomato preserves and the fourth for pasta and cheese. In other words, and given the importance of this market for our food&beverage, between the coronavirus epidemic and the "no deal" risk in Brexit, we can't sleep soundly.
In order to understand what is happening in the perception and consumption behaviour of the British citizens struggling, like the rest of the world, with the lockdown, Nomisma Wine Monitor carried out a survey of a sample of 1,000 wine consumers in Great Britain (mainly residents of London and the large cities of the UK with over 500,000 inhabitants).
It should be immediately said that the trends that are characterizing (or have characterized, depending on whether quarantine is over or not) wine consumption in the above mentioned period and in the different world markets, are generally characterized by a shift towards "cheaper" types of wines.
The closure of restaurants and pubs/wine bars, the growth in consumption on a daily basis and no longer occasional, the reduction in the frequency of purchases from shops and large-scale retail outlets (to avoid too much contact with other people) and, of course, the increasingly stringent family budget constraints, are the main reasons for this repositioning of consumption downwards. A trend that has affected Italy, the United States and also the United Kingdom.
"One of the main factors of choice in wine consumption that remains, and indeed acquires even more importance for the British consumer during the lockdown is precisely the price, alongside the availability of information on the web, as emerged from our survey. In fact, one in two British consumers said they bought wine online during the quarantine period," says Denis Pantini, Head of Agri-Food at Nomisma.
The whole world is country. With the closure of the Horeca channel, the development of wine and food e-commerce has experienced dizzying growth rates in all markets affected by the Covid-19 outbreak. It remains to be seen how these trends will consolidate. As far as the hypothesis of "revenge spending" is concerned, the British do not seem too keen on celebrating - when there will be - the end of the lockdown. "Only 18% of consumers say they are ready to spend more on wine once pubs and restaurants reopen, compared to 17% who say the opposite and another 28% who will even drink less wine because they will leave home less frequently than they did before the epidemic," adds Pantini.
Apparently, multi-channel will therefore become a must in the commercial strategies of Made in Italy food producers, given the legacy that seems to leave us the coronavirus in terms of wine&food purchasing behaviour. And probably, it will not even be the only challenge. In fact, it should not be forgotten how the United Kingdom, since last February 1, has become a "Third State" compared to the European Union with the provision of a transitional regime until December 31, 2020 during which the customs union still applies and above all, the conditions for a future partnership are being negotiated, starting from 2021. Unfortunately, the first signals coming from the negotiating tables do not seem to go in the direction of reaching an agreement.
"You can almost feel the feeling of the British government wanting to start from scratch, taking advantage of the impact of the pandemic to reprogram the entire economic and trade policy of the country, with all the risks involved," says Paolo De Castro, Member of the UK Monitoring group of the European Parliament and member of the Scientific Committee of Nomisma. Risks that first and foremost certainly concern the United Kingdom itself, given that the country's food self-sufficiency is barely 50%. But they also affect Italian food companies, in light of what has been described above about the importance that Great Britain holds for our exports.
Source: Nomisma Press Office
