February 14, 2020

Corona Virus Impact Café Market Australia / New Zealand 2020

David Parnham –
Research Director Café Culture International

Date 14-02-2020

Global Pandemic (nConV) or at best a
near miss?

Many have asked me over the last few weeks the potential business effects and damage caused by the Corona Virus worldwide outbreak and yes, I have had many of these discussions in which I will now try to summarise for you all who are worried and working in our great FOOD & BEVERAGE (F&B) / café market here down under. I am not going to fully explain what is the Corona Virus (nConV) there are enough clear medical reports and other articles to go research yourself on the web.

Having lived and worked in the development of the China Café Market expansion over the past six successful years and having been one of the few to visit regularly many Tier one large China cities and their specialty cafés like those found at Wuhan in the Hubei province central China. We can report that Wuhan as the “Ground Zero” site where the Corona Virus commenced early December 2019. The fact remains that 96% of all Corona Virus infections are in China Mainland and sadly there are now over +60,000 persons reported to be seeking medical care and thus many more are to date unaccounted for due to the 14 day virus cycle. The largest concern to most of us is that the Infection rate rise has not curved to the cured and thus started to decline in the number of infected persons and this has added to the Global Pandemic concerns of all governments and health care services.

Whilst we pray for all those infected persons to recover and the prevention of all those yet to attract the Corona Virus both in China and elsewhere, here so far In Australia and New Zealand we have a very low number of Corona Virus infected persons and here there are inward restrictions on “resident only” entry in place since early February 2020 and have now been extended another week and most likely to the end of the month awaiting the same signs of a lower infection rate decline and other health care measures before these and any new restrictions are lifted.

Outward travel to China also has Government travel warnings and many mainstream airlines have already cancelled or at best heavily reduced flights to China – This has not only personally effected my family and I, as we are now remaining in Australia until both the travel to China resumes and/or the infection rate declines. The more important fact is that hundreds and thousands of China University Students, regular holiday visitors, family and friends of Australian residents have been stopped entering Australia and New Zealand at this peak infection time and this has dramatically impacted the local hospitality sectors ( China is 20% of all Tourism dollar earnings ) by both dramatically reduced patrons in CBD Cafes, our amazing tourist areas and educational centers where normal F&B business flourishes at the start of the year and during the popular Chinese New Year period that started 23rd January lunar calendar 2020.

It’s interesting to look at the past to best understand what lays ahead as most past pandemics have taken 6-18 months to run their course and then peters out as measures are taken to slow their spread (eg, hygiene, quarantining, banning gatherings, preventing travel). SARS ended quicker due to the nature of the virus and rapid action by authorities. In 2005/2006, there was significant concern that a severe strain of bird flu (called H5N1), which was resulting in human casualties, mainly in parts of Asia where people had contact with chickens, would mutate into a form that was readily transmissible between humans. However, this didn’t really eventuate and as such the economic impact was modest although it did cause bouts of volatility in share markets. Similarly, concern that the spread of swine flu would become a global pandemic rattled share markets for a while around April 2009, and Ebola did the same in 2014, but both quickly faded.

Stick around for next installment coming soon…

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