French wine producers concerned about cash flow

Tuesday March 24 2020 by Vitisphere

“The challenge is to get through this crisis as calmly as possible”, says Jean-Marie Fabre.“The challenge is to get through this crisis as calmly as possible”, says Jean-Marie Fabre. - Photo credit : VIF

How is the spread of the coronavirus epidemic in France affecting independent wineries?

Jean-Marie Fabre, chairman of French Independent Winegrowers: It is important to understand that the independent winegrower model is based on very close market contact. We are in a position to adapt rapidly to demand, but the flaw in this model is that we don't have any cushion and blows hit us very quickly. We have had to contend with a challenging economic situation for months now (American taxes since October 2019, coronavirus in Asia since January 2020...) plus the shutdown in domestic and European markets due to isolation (restaurants closed, winery sales limited due to isolation, independent winery shows cancelled...). In the coming weeks we will not be working on a lean model, we will be working with zero cash flow.

To avoid economic collapse, the government has unveiled a raft of business support measures. Will they be enough to get through the health crisis?

I welcome the number of measures (banking and fiscal) and the proactive and powerful way with which the government has responded with no differentiation scale so that no economic sector is left by the wayside. The government plan needs to incorporate a few specifics to be the most efficient. The sustainability and survival of our businesses depend on it. We are currently making the President, Prime Minister and Ministry of Economy aware of these specific needs.

What are your specific requests for the wine industry?

We need measures to help the workforce, which is essential to preserve the quality and quality [of the 2020 vintage]. Partial or full temporary lay-offs cannot be applied to work in the vineyard. We need our vineyard employees despite the coronavirus. But we will have to pay these employees when the cash inflow runs out. At the very least, we need total exemption from employers’ contributions for employees.

 

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