Wining at home won’t compensate for 90% drop in catering clients

Drink the blues away with a surge in online wine merchants offering delivery services

Delivery services are on the rise due to coronavirus-induced exigencies, and winemakers and merchants in Malta have turned to online sales and home distribution. But they say this is hardly enough to sustain the business.

Beverages are part of the ‘essential products’ designation, and its sellers are therefore allowed to remain open even as most of the country’s business branches are in lockdown. However, winemakers’ main clients are caterers and restaurants, and they are on order to close.

Facebook has been flooded with adverts that barely made an impression before — or we just weren’t noticing — but food, wine, and other miscellaneous products are being offered as deliveries by various establishments on newsfeeds.

“We have been online for the past two, three years growing our website slowly and taking it more seriously in the past year once we introduced a large range of spirits,” Andrew Forace, the director of Business Spades Wines and Spirits said. But he concedes that the digital footprint of the beverage company has increased and that online sales have risen for the past two weeks even if this followed a general increase in the past few months.

“We have lost 90% of sales because our main supply is to the catering industry and they’ve all been ordered to close. Our sales people are on forced leave and delivery persons are on reduced hours to a few hours a week,” he said.

Wine is considered a luxury, exceptionally so in times of crises — evocative adverts on social media portray glimmering stemware glasses and French ruby reds on tables adorned with upscale dining. However, the government has businesses such as Spades as a Category B business in the stimulus package it announced to mitigate the crisis’s economic impact. Forace however expresses caution.

“The government will only pay €160 a month per employee while wages I pay employees are closer to €1,300 a month or €1,500,” Forace said.

He added that the problem is further compounded when clients face issues when attempting to pay for old or pending orders due to cashflow problems. “The tourism industry will take its time to start again. Losing the summer sales is worrying because this is our main season to make money.”

Josef Bonello, wine consultant at Attard & Co. Wines, said that the business has been operating online for a number of months in response to current market trends. “This had been showing healthy sings of growth. We have in place a communications plan, which sees specific promotion from time to time,” he said, explaining why wine adverts were popping up on people’s newsfeeds.

Like others, the business suffered heavy losses as a result of the shutting down of restaurants, wine bars and other catering establishments even though home consumption and off-trade has clearly seen a notable increase.

“In no way does it compensate for considerable on-trade losses. The net effect on wine sales [that coronavirus has] is clearly in the red since the catering sector has been one of the greatest casualties due to forced closure as well as due to the shutdown of incoming travel. This situation will take time to recover,” Bonello said.

The massive slowdown in sales, he added, has been exacerbated by health concerns when dealing with physical contact. “We take pride in offering optimal levels of service which has always been the result of very frequent face-to-face encounters between our staff members and clients. This is not possible for the time being. The level of delivery service which we are renowned for has also been challenged by this situation.”