Champagne in turmoil over new harvest

The Champagne trade is wrestling with a vital decision about fixing the maximum permitted yield for the 2009 harvest against a background of collapsing export sales in the first half of the year, mounting stocks and falling prices.

With shipments to all European countries down 31.7% and those to further flung markets outside Europe dropping a massive 43.1% in the year to the end of June, only relatively stable domestic sales in France - down just 5.5% in the same period - are saving weaker producers from financial disaster.

Representatives of the growers and the negociants were this week hammering out an agreement over this year's harvest at a meeting of the Bureau Executive of the CIVC. While Champagne houses were calling for large cuts in maximum permitted yields as a means of balancing supply and demand, with the price of Premier prix champagne in French supermarkets dropping below €10, the growers are resisting this.

Paul-François Vranken, head of Pommery Vranken Monopole who sits on the executive, has already called for the maximum yield to be cut to 7,500kg/ha, the equivalent of about 210m bottles of Champagne and a massive reduction on the 405m bottles produced from the 2008 harvest.

Patrick le Brun, the president of SGV Union representing the growers, says they are determined not to go below 10,400kg/ha which corresponds with global sales of 300m bottles. "A yield of 10,400kg/ha would already be a 35% reduction in turnover for the growers which they are funding," says Le Brun. Sales of growers' champagnes are not that dramatically down so they need the stock, he added.

The houses, especially those concentrating on exports, have borne the brunt of the slump in sales - their total shipments in the first half of 2009 were down 23.3% while those of the growers, over 90% of which are made in France, only fell 5.2%. Patrice Noyelle, MD of Pol Roger says: "Ideally a cut in yield to 7,500kg/ha will be agreed at the meeting. However this will be difficult for the growers so perhaps a compromise of 8,000kg/ha could be acceptable with 2,000kg/ha blocked and impossible to bottle and paid for in three years time."

If the CIVC Bureau Executive can't reach agreement the regional prefect representing the French government will set the figure. The harvest is expected to start around September 12 so the decision can't be delayed.

• Sommeliers