Spain Struggles to Respond to Coronavirus, and Its Wine Industry Suffers

Wineries endure work restrictions and slumping sales as the nation shuts down and the COVID-19 death toll rises

Spain Struggles to Respond to Coronavirus, and Its Wine Industry Suffers
A lone man walks through a Madrid plaza as Spain continues a broad shutdown to combat COVID-19. (Gabriel Bouys/AFP via Getty Images)
Mar 30, 2020

The novel coronavirus came late to Spain, but it came with fury. As late as March 7, Spain had fewer than 500 confirmed cases. But wine country was an early casualty. Police locked down sections of the small city of Haro, at the center of Rioja, after authorities confirmed dozens of cases there, which they believe some residents contracted at a funeral held two weeks earlier in the nearby Basque Country.

On March 13, Spain’s government declared a state of emergency. The entire country largely shut down, including restaurants, bars, shops and other businesses deemed "non-essential." Nevertheless, by March 30, Spain reported more than 85,000 confirmed cases of coronavirus, with 7,340 deaths, second only to Italy. Among the victims was Carlos Falcó, Marques de Griñon, a Spanish innovator and leader in wine and olive oil at his estate, Dominio de Valdepusa.

Victor Urrutia, CEO of Cune, a leading producer based in Rioja, lives in Madrid, the epicenter of the pandemic in Spain. He knows multiple people who have been diagnosed with the virus. "Nobody is being tested nowadays here in Madrid," he told Wine Spectator. "So you are either very sick and have gone to the hospital or you should be at home, healthy or not." The government announced plans late last week to begin carrying out mass testing at a requisitioned fairground in a city park.

The rush of new cases has overwhelmed health-care providers, some of whom have filed lawsuits against the government for failing to provide protective equipment like masks. A number of vintners expressed frustration with the Spanish government's response to the crisis, claiming that measures were ill-considered and dangerously delayed. The Spanish army has asked NATO for ventilators, protective gear and testing kits.

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"There's still a lot of confusion about what's to come," said José Moro, president of Bodegas Emilio Moro in Ribera del Duero. "Changes are happening fast, and while a week ago many people were eating at restaurants, now everybody is aware of the seriousness of the matter. People have been enforced by local authorities to not leave their houses, except to buy groceries and medicines."

Guillermo de Aranzabal is executive chairman of La Rioja Alta, a winery in Haro. "I can't even ride my bicycle in the countryside! Or go walking to the mountains even alone!" he said. "All restaurants, hotels and wine shops are closed. Only supermarkets, pharmacies, tobacco shops and banks are open. Employees are advised to work from home if they can. People can only leave home to go to work or to one of those open shops."

Business unusual

Wineries continue the essential work of tending vines and processing wine. Miguel Torres, of Familia Torres in Catalunya, reported that his company was operating, "but not at 100 percent. Only the vital staff comes in. Most of the people are working from home. The bottling lines and the expedition warehouse are operative but under strict measures of security and control."

Moro is taking the same approach: "Most of the office team are working from home. The team at winemaking and logistics are working at the premises, with changes in the schedule and way of operating." Both Cune and La Rioja Alta have pledged to keep their employees working, and at full salary, for as long as possible.

But the almost complete economic shutdown, coupled with conditions in other countries, means their projections are bleak. "Many orders have been canceled," said Aranzabal. "Domestic sales are almost inexistent. I guess sales will be reduced by more than 60 percent." For Urrutia, Spain's restaurant shutdown has had a significant impact. "On-trade is three-fourths of what we do domestically, which is half what we do" in total, he said.

Exports to the U.S. market are an important part of sales for top Spanish producers. But at present there's little relief to be found there. As Moro observes, "In the U.S.A. market, it's going to be a challenging year, where COVID-19 comes right after the [25 percent] tariffs imposed last October on [Spanish] wines below 14 percent [alcohol] and the threat of the 100 percent tariffs that, while they didn't take place, damaged the industry by delaying shipments from Spain."

When will the virus pass, restrictions be lifted, and life get back to normal? Few would hazard a guess.

"Everyone is longing to know how long the confinement and isolation will last, but it's impossible to know," said Ferran Adrià, the former chef who now heads elBullifoundation in Barcelona. "I believe we might have some information by early May. For now, it's premature to make predictions."

However, there was general agreement that more economic damage was inevitable.

"Spaniards are lively people; texting of jokes is through the roof, plenty of time spent on the phone with family and friends," observed Urrutia. "But many people are losing their jobs. Our economy is based in large part on services. A severe depression is looming ahead."

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