Running a business through Lockdown is hard enough in the UK but how does it work if you are an Englishman running a large wine business in France? Tim Ford, managing director of Languedoc estate Domaine Gayda explains how he has handled télétravail (working from home) and Chômage Partiel (furlough), keeping his export markets open and working on the new harvest. And also how impressive and fast the help has been from the French government.
“Contrary to all the positive stories about wine consumption going up during confinement, internet sales booming, home deliveries, etc there just has been less wine consumed globally…. why else would the EU be funding a billion-litre distillation project for excess wine, to clear the tanks out for the new vintage?”
Domaine Gayda is a wine estate 25km south of Carcassonne in the foothills of the Pyrenees, established in 2004 by Tim Ford and Anthony Record MBE and managed by Ford. Gayda produces 21 wines, the most well known being Chemin de Moscou, the 2017 vintage of which has this year been voted Best Organic Wine of France at Mundus Vini Biofach, the international organic wine fair.
PD: How has lockdown been for you in the Languedoc?
Tim Ford: Well as we have remote vineyard sites, we were allowed to travel to all our sites with no problem. We had no cases or suspected cases in the team so we had so self-isolation issues. We did miss our 10 Spanish workers that come every year for May to help out in the vines so with the high rainfall we did get behind with a few jobs and were touched by a bit of mildew.
Personally I missed all the business travel and the visits of clients we normally get in April, May and June but we need to adapt to the new norm.
Has the region been badly hit by Covid-19?
No, we have only had a few cases… obviously the space and the low population density has helped.
What have been the greatest challenges in terms of running the winery and tending the many vineyards you have?
To be honest we have got through this period with no big impact in the vines – working outdoors and not in big groups makes social distancing easy in our profession. As I said earlier we missed the help from Spain but had plenty of people looking for part-time work so all went quite well.
What changes have you had to make?
Probably we might have suffered a bit by taking on unskilled workers and had extra training issues, I think the excess rain has had more impact on our vineyard management decisions this year than Covid. We have had more rain already than we had the whole of last year!
We have had a lot of our support and marketing staff working from home (we call it “télétravail”). The new office working environment has changed and will remain in place for some time with less people per office etc.
Obviously travel and receiving clients has stopped totally – I do lot of presentations on Zoom and send video updates to many of our clients. I have presented many wines to sales teams around the world on Zoom. I wonder if this will become the new norm?
What help have you had from the French government?
We have had good support with our “Chômage Partiel” system (your furlough equivalent) although we could not put a lot of people on this system as two thirds of the work is in the vines and we have a vintage to bring in later this year!
Capital repayment on loans has been put on hold until September (but not the interest). For leasing on vehicles we have been given a three month holiday. The main help has been a 5 year interest-free loan of 25% of last year’s gross turnover figure of the company loaned via the banks but guaranteed by the State (PGE). One year repayment holiday.
Does being an English wine producer in France make it harder in any way?
Never has been an issue for me over the last 16 years, maybe as I speak French? Have a French wife? But I am sure, like in all these cases, it is how you behave and interact that counts but for whatever reason I never faced one negative issue of being English in a French working environment.
How is business? How badly hit are sales?
In March we did about 40% of our budgeted sales, then April about 55% then it come back to about 75% in May. We are looking good for June thanks to opening up of more markets. This would have caused serious cashflow issues but, due to the PGE loan this has been mitigated. However, we will have a serious profitability issue, we have to pay back loans and lost sales will never be recovered.
Are you managing to service your export markets?
Well most of them came to a grinding halt in March. We have product so it is just a matter of those markets opening up. They have, of course, asked for extended payment terms etc so we still have challenges.
Which have been the hardest hit?
Our biggest worry is the USA. On top of tariffs of 25% we now have the big shutdown which seems to roll across the States. Of course the big issue is the stock they have already in place. Also, we have product labeled and bottled for specific markets in the States so will struggle to divert that to other markets.
Now that lockdown has been lifted in France what are your key priorities?
Our priority is to keep our product visible on the market. We do a mix of restaurant, caviste and internet sales (via third parties) in France which represents 60% of our global sales so that is incredibly important to us. However we are seeing great loyalty, buyers are not in the mood to change suppliers or take risks so the loyalty and support we have given to our buyers over the years seems now to be paying off. I have been positively surprised our buyers are communicating and making efforts to pay outstanding bills even when they have been closed for months.
Without going into too many details we have made every effort to get the restaurant clients operating with our product, however, shockingly many restaurants will not open at all this summer as they feel they have already missed too much of the season to bounce back.
When do you think you will running at full speed again?
I am giving it until January next year until we are back on track 100% (barring second waves and new lockdowns). This is a ‘forgotten year’ to get through without going out of business or harming quality. We are focusing on the new vintage and the 2019 and 2018 wines we have in stock. We really want to be in a position to move on to the 2020 young whites by March next year so the idea is to try and sell through the 2019 before this time. I can imagine if this is not achieved by Xmas then a few promotions might have to be put in place. We need to be current in vintages for next year or we will be continuously chasing our tail.
I do have to sum up by pointing out that, contrary to all the positive stories about wine consumption going up during confinement, internet sales booming, home deliveries, etc there just has been less wine consumed globally…. why else would the EU be funding a billion-litre distillation project for excess wine, to clear the tanks out for the new vintage?
Wine is a social drink by definition and we have all been told not to socialise!
It has to have an impact. One positive we have seen in many countries is that home consumption has gone up in value per bottle. Actually our lower end wines have been hit more than our higher range, which I would have thought counter-intuitive.
Gayda wines were imported by New Generation Wines until this year and can now be sourced from Cambridge Wine Merchants.