jamie goode's wine blog: Champagne in crisis? (Updated)

Tuesday, September 08, 2009

Champagne in crisis? (Updated)

[Note added later: for a thorough review of this issue, including some important corrections to the information here, you should read the comments below, and also this article just posted on Jancis Robinson's website. JG, 10/09.]

There's a great piece in the Guardian about the issues facing Champagne, which quotes both Adam Lechmere and Robert Joseph. The key issues:
  • Champagne sales are down (exports down 45% in the first half of 2009 versus 2008 figures)
  • This year, growers are only going to be allowed to pick about half their grapes, leaving the rest on the vine, in attempt to reduce supply to keep demand high
Effectively, Champagne is a brand, and one of the rules of brand management is that you shouldn't kill your brand by discounting it.

Yet the sorts of market manipulations attempted by the Champenois make me feel uncomfortable.

The horror scenario for Champagne is that consumers should lose the perception they have that Champagne is special and worth a huge premium over other sparkling wine styles. What if consumers decide that it's fizz they want, not Champagne, and they can get fizz that ticks all their boxes from other regions?

With Champagne producers committed to protecting their price points through regulating supply, this creates an opportunity for sparkling wines from other regions.

Would it be so disastrous if Champagne were to win new consumers with £10 supermarket own-label Champagnes, £15 Grand Marques, and more prestige cuvees kicking in at £30? Lower margins but increased volumes might win customers who otherwise would shift to discover other sparkling wine styles.

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At 10:38 AM, Anonymous 1WineDude said...

Champagne is a brand as you rightly point out. But it's one centuries in the making, which will probably give it enough staying power to weather this storm...

At 10:58 AM, Anonymous Matt said...

I posted on this just yesterday. I expect the region to weather the storm as well. Reducing prices is controversial on their part. It doesn't help the brand or their bottom line in the long run. But of course I can understand it from a consumer point of view, because I am one!

At 2:08 PM, Blogger charlie said...

Actually in The Observer. I thought was poor quality journalism.

From the front of the article
"Seasonal bargains may even result in widespread sales of quality brands as low as £15 a bottle"

and from the end
"But there's no guarantee that you'll get a good buy. Moët & Chandon is not going to be discounted down"

These two views cannot stand together. A comment from one or more UK supermarkets would have helped, if the writer could be bothered.

In addition we have the ludicrous statement that

"it is no surprise Britain is the biggest consumer of champagne outside France. Although a 17th-century French monk called Dom Pérignon invented the wine at his Benedictine abbey – and set a descriptive standard for wine critics of the future by claiming: "I am tasting stars" – this happened 60 years after a Briton, Christopher Merrett, had presented a paper describing how adding sugar to wine made it fizz"

So we drink lots of champagne because of a paper in 1662? I think not.

At 4:46 PM, Anonymous Anonymous said...

Handford Wines in London hosted a blind tasting of 30 champagnes and NOBODY spotted the "ringer" which was Cloudy Bay's Pelorus.

At 3:53 AM, Blogger Camoranesi said...

The most interesting thing about this to me is how high they have been cropping. 14.2 tonne to the hectare is NOT low, and I'd wager that there's not much wine that sells in the price brackets that Champagne does that is cropped that high.

At 5:43 AM, Blogger Chris Townend said...

Surely this is the same story the press run every time there is a down-turn in the markets and the 'city boys' have to wash the Aston Martin with Asti rather than Dom Pom?

At 5:20 PM, Blogger Couves said...

I'm no expert in wine economics, but isn't price fixing/collusion illegal in the EU?

At 7:57 PM, Blogger Andrew Halliwell said...

I think I agree with just about everybody here. Champagne can often be indistinguishable from other sparkling wines in blind tastings and it's easy to find examples where it costs more but is "worse". But in the long run people will always buy it, because it is perceived as the best. Just like many people will always perceive Bordeaux to be better than Aussie reds and Levi jeans to be better than other brands.

The crop levels are very high for a premium region, but I'd say that some of this you can get away with for sparklers, because you actually want the base wine to be acid and neutral - as much of the character and quality comes from long yeast aging.

What surprises me the most is that wasn't it only last year that the Champagne region moved to classify loads of hectares that used to be outside the region into the Champagne region? Has this gone ahead or did they stop it in time?

At 8:08 PM, Blogger champagneman said...


The article in The Guardian and a similar one in the Telegraph miss a few important points and I agree with Chris's comment - there's some pretty poor journalism going on here.

An alternative view can be found at www.debateabubble.com

It's simply not correct to say that half the crop will be left to rot on the vine.
The actual harvest will be 14,000 kg/hectare. The total crop is estimated at 14,500kg - so all but a handful of the grapes will be picked.

However this year some 4,300 kg/hectare ( more for the big houses) must be set aside, after pressing, to be left as 'reserve wine' - still wine that cannot be made into champagne until Oct 2010 at the earliest.

This is a sensible commercial measure to reduce stock is the short term, that would be taken in any business - no point in producing stuff that you can't sell.

The 45 % drop in sales is not the latest sitauation either.It's not so gloomy ( source CIVC - the official champagne authority which publishes all the stats)

Champagne houses can only set the price at which they sell. They can't control what supermarkets charge.

This year is certainly tricky for champagne, but it's not the first time this has happened - early 90s then again early 2000s - so I agree that it doesn't mark the death knell of champagne



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