China Wine

Restaurants and bars in China resume business

Restaurants and bars in China are cautiously resuming services, as the country emerges from a two-month lockdown, with what’s estimated that 80% of catering business are resuming its normal operation, according to the country’s Ministry of Commerce.

The recovery is the strongest sign yet that restaurants and bars in China, the country hit first by the highly-contagious COVID-19, are returning to normality when most are closed in Europe and the US.

According to official data released by the National Bureau of Statistics, the country’s food and drinks industry generated over RMB 4.67 trillion (US$663 billion) last year, with 15.5% coming from Chinese New Year Festival.

But this year due to the virus outbreak, the country’s catering and drinks industry lost RMB 500 billion (US$71 billion) during the seven-day traditional holiday period, says the bureau.

The gradual resumption also offers some hope for wineries and wine merchants that rely on on-trade wine sales inside the country to offset damages done by restaurant and bar closures in Europe and the US, where infection numbers had surpassed mainland China.

Diageo, the maker of Johnnie Walker whisky and Smirnoff vodka, in its latest company update, also affirmed the recovery.

“In mainland China, we are beginning to see a very slow return of on-trade consumption, as restaurants and bars have started to gradually re-open,” it says.

But its travel retail sector and on-trade sales in the US and Europe are greatly impacted by the outbreak, leading the company to scrap its 2020 financial guideline altogether.

“Given the global nature of the COVID-19 pandemic, and the uncertainty around the severity and duration of the impact across multiple markets, we are not in a position to accurately assess the impact of this on our future financial performance. We are therefore withdrawing our guidance on group organic net sales growth and organic operating profit growth for fiscal 2020,” Diageo explains.

In various cities and provinces within China, local governments are giving out dining vouchers for residents to encourage spending at on-trade premises in Jiangxi, Jiangsu, and northwestern Ningxia.

But in Wuhan, the epicenter of the outbreak in China, recovery is slow although the city lifted its city-wide lockdown on April 8.

Small business owners of restaurants still face a lot of uncertainties, as they are not yet allowed to operate in full capacity, with only takeout and delivery services available.

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