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Spain's Cava Wine Sector Takes Milder Pandemic Punch Than Expected

By Dave Simpson

With bars and restaurants shut for months in parts of Spain and tourism drying up due to the coronavirus pandemic, the country's €1.2 billion cava wine sector had been expecting a devastating year.

But early projections of an up to 40% collapse in sales proved overly pessimistic, with producers of the bubbly drink expecting the year-end holidays to further dilute the impact on the industry led by brands such as Freixenet and Codorniu.

Geographically-diversified exports and growing online trade targeting home-based consumption have kept the sales decline to just over 10%, signalling a potential template for other hit-hard sectors in the battered economy.

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"No one desires a fall, but I'd even say it's a pretty good result considering the context," Cava Regulatory Board chairman Javier Pages said.

Shipments of cava - mainly made in the northeastern Catalonia region - fell by 10.5% in January-September from a year ago, with a steeper 13% drop in domestic consumption than abroad, of 7%, Pages said.

He hopes that numbers will improve during the festive season, which is traditionally the best period for cava sales, even if dampened this year by a 10-people limit on gatherings per household and with most corporate parties cancelled.

In May, Damia Deas, chairman of AECAVA business group representing 90% of the sector's revenue and manager of the Vilarnau brand, forecast that sales could fall between 25% and 40% in 2020 from the 250 million bottles shipped in 2019, which was the second-best year ever.

"No doubt, it's a terrible year...We had prepared for the worst, but our sector has been able to resist a bit better than we thought thanks to exports," said Deas, citing a good standing in Britain, Sweden and Holland.

Approximately a quarter of the over 200 producers still have staff under furlough schemes, he said, adding that those who export less are more affected than others.

Looking Ahead

"I believe 2021 will be a year to stabilise the ship and from 2022 we start thinking about growth, expansion and investment," Deas said.

News by Reuters, edited by Hospitality Ireland. Click subscribe to sign up for the Hospitality Ireland print edition.

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