Big discounts expected on Champagne this Christmas

By Gemma McKenna

Published: 21 July, 2014

Champagne agents expect big discounts at UK supermarkets this Christmas, thanks to weak demand for the sparkling wine in its home country.

The Comité Champagne last week set the 2014 yield slightly up on last year, at 10,500 kilograms per hectare, including 400 kg/ha allowed to be released from producers' reserve stocks, rising to 500 kg/ha if sales exceed 307 million bottles by year end.

Champagne Retailers are expected to slash prices on Champagne again this ChristmasThe weakness in the French market is driving buyers to 'hunt for voumes' which is keeping prices low, say agents. While revised yields look positive, it's difficult to assess the impact this will have on Champagne sales.

The modest increase on last year is in response to the small increase felt in Champagne markets globally - shipments are up 1% on last year. However the Comité said: "The situation in France does however remain fragile, while other EU and especially non-EU countries are enjoying sustained growth."

Keith Isaac MW, general manager of Castelnau Agencies in the UK, told Harpers.co.uk that the weakness in the French market - which consumes at least two thirds of Champagne's production - meant people are "hunting for volume, which is having an impact on keeping prices down".

"Going into Christmas I still expect a lot of discounting - driven by the domestic weakness for Champagne. The Euro helps a little bit but gives more scope to discount.

Champagne de Castelnau is the official sponsor of ASO, organisers of the Tour de France

"From a branded perspective we're making solid progress from our Tour de France label - we've picked up some extra volume and helped grow brand awareness for Champagne de Castelnau. Our duty free airports and British Airways business is also doing well.

"Yields are pretty solid and so far Champagne has avoided the hail damage of Burgundy, Bordeaux and the southwest. It should make another big crop."

Andrew Hawes, managing director of Mentzendorff, which handles Bollinger Champagne in the UK, said: "The revised 2014 yields announced by the Comité Champagne should be regarded as broadly positive news. However, one should probably not try to read too much into such a complex technical subject, where annual yields are balanced against stocks of reserve wines with caveats applied that are linked to forward sales. Frankly, this is an area that it is hard for anyone outside those directly involved to fully understand; the important point to note is that this again demonstrates the Champagne region managing its production on an economic model, rather than a production model.

"This is something unique within France which has stood, and will continue to stand, the Champagne industry and major markets such as the UK in good stead.

"The overview here is that this modest increase in production mirrors a slightly more optimistic reading of the global market, in which the UK remains a key market (No2) and in which many smaller markets are demonstrating strong growth - the overall picture would be more positive were it not for challenging conditions in the domestic French market that had 'taken up the slack' in the early years of the financial crisis, with volumes rising to well over 50% of total production."

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