'Crazy' offers dismay Champagne suppliers

Published: 19 December, 2011

Champagne suppliers have expressed dismay at deep discounting in the category this year, at a time when their own costs are rising.

Many supermarket exclusives are on offer at £9.99 and there are half-price deals on a number of major brands.

Andrew Hawes, chairman of the UK Champagne Agents Association and managing director of Mentzendorff, said: "We've been quite surprised by the ferocity of the activity this year.

"It's simply explained by the economic situation - supermarkets are prepared to invest ever greater parts of their margin in activity designed to kick-start consumer spending. But that doesn't lessen the concern."

Pol Roger UK managing director Nick James said Champagne discounts "send a confusing message to consumers", describing some current pricing as "crazy".

He added: "Any company over here supplying the major multiples must know what's going on when orders are much larger than normal."

But some suppliers maintain that orders are sometimes placed by third parties, or regard discounts as a necessary evil to hit volume targets.

Prices for entry-level Champagne have increased from £12.50 to nearer £15 this year, and there are predictions that the co-ops producing the cheapest wines will find it more convenient to shift stocks in French supermarkets, cutting off some of the UK supply.

Grape prices are also increasing in the region.

Hawes said: "There's always a finite lifecycle to this sort of activity. There are diminishing returns for all parties."

Tony Stones, founder of Champagne Warehouse, does not understand why grandes marques are allowing deep discounting. He said it is affecting restaurant sales, with buyers now starting to look outside the big labels.

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