Grupo Rioja calls for more support as ‘Basque Wine’ shored up

By Barnaby Eales

Published: 10 June, 2020

Rioja wine producers have lashed out at the ‘insufficient measures’ adopted by the Spanish government yesterday to alleviate the impact of Covid-19 on Spain’s wine sector.

Francisco Hurtado de Amezaga, technical director at Marques de Riscal, told Harpers that the measures were “totally insufficient given the global dimension of business which the sale and production of wine represents".

Grupo Rioja, the association representing key Rioja brands, said a greater focus on aid was required for DO (PDO) wines, which create greater value for producers compared with lower quality non-DO wines. Covid-19 has particularly hit Spain’s on-trade where many of its DO wines are sold.

The Spanish government’s €90.5m Covid-19 aid package is made up of European Union funds –much of which centres on the distillation of wine at low prices per hectolitre. It also includes aid for storage and green harvesting and, for the first time, measures include limiting yields on non-DO wines.

Rafael del Rey, director of Spanish wine market observatory, OEMV, said the Spanish government had made “an important effort” to reduce the supply of wine.

The Spanish Wine Federation (FEV) estimates that Spanish wine sales fell by 35% in the first quarter of this year.

Ahead of an anticipated bumper crop this year, Rioja’s regulatory board is now expected to reduce production by 10% this harvest by adopting new rules to limit maximum yields.

However, Grupo Rioja and the OEMV said the Spanish government had failed - unlike France and Italy - to provide additional aid other than EU funds to the wine sector.

“Funds for the storage of wine is welcome, but we would have liked more aid to promote the sale of wines, rather than the distillation of wines at low prices, which is something Rioja producers are not going to do,” said Iñigo Torres, director of Grupo Rioja.

In contrast, Rioja Alavesa producers have broadly welcomed the autonomous Basque government’s €50m injection of liquidity for wine producers through loans. The Covid-19 funding package allows Basque producers to tap into a maximum of €200,000 each in loans, which are to be paid back at low interest rates, starting in the fourth year of a seven year cycle.

Grupo Rioja said it would have liked to have a higher ceiling for loans.

“Last year some of the brands bought in, for example, €5m worth of grapes from growers, so the €200,000 ceiling is a limited amount,” said Torres.

But smaller producers represented by ABRA, the association of Rioja Alavesa wine producers, have applauded the Basque government’s measures, which include ‘Basque Wine’, a new and innovative €3m promotional brand campaign adopted to help sales of Rioja Alavesa and Txakoli wines internationally and locally.

Basque Wine promotional funds will be available to producers whose wine is made 85% from grapes grown in Euskadi, but Torres added that the funds for the sale of Basque Wine, which includes the digitalisation of wine sales, should be available for all producers who make wine in Rioja Alavesa, including those who bring in higher amounts of grapes from other parts of the Rioja DO.

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