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Big name Champagnes fare best as Brexit hits smaller players

Published:  01 June, 2018

Brexit-related inflation is hitting drinkers of cheaper and less well-known Champagnes hardest in the UK as sales of entry-level bottles continue to fall, while bigger name brands and more expensive cuvées are faring better.

Annual Champagne sales in the UK fell by -11% in volume and -5.7% value during 2017, with some consumers turning to cheaper sparkling alternatives, or trading across to the growing English sparkling wine category.

“The UK reduction in volume on entry level Champagne is linked to Brexit and a reaction to certain aspects of Brexit,” said Jean-Marie Barillère, president of the Union des Maisons de Champagne.

“The weakened pound and strength of the euro has increased the price of Champagne by 20% to the UK consumer and this has meant that average Champagnes, without a strong brand name, is suffering a lot,” he added.

Well-know Champagne labels such as Moët, Bollinger, Lanson, Taittinger and Roederer continue to “do very well” in the UK, but lesser-known and own-label wines are continuing to fall away.

Sales in France are also suffering, with volumes falling away for the past seven years, where tax increases have been among the factors that have again reduced the buying of entry-level Champagnes.

According to Barillère, however, the picture of a UK market skewed to the higher end is likely to continue after Brexit reaches some resolution and into the foreseeable future as the global market for Champagne continues to rise.

“Overall the situation for Champagne is good, because while the biggest markets - France and UK - are declining, other markets, particularly US, Japan, Hong Kong and Mainland China, are increasing and we are seeing an increase in average prices,” Barillère told Harpers.

“In Champagne we are not very far from the ceiling of our production, and last year we increased global turnover without increasing our volume, and this will be our business for the next ten years, as companies will be able to increase the average value of the bottle.”

Suggesting that there would be a “change of perception” for the consumer as Champagne continues to flip from increasing volumes to increasing prices, Barillère highlighted that even the strongest economies in Europe are being outperformed by markets in Asian and the Americas.

The latest figures from Comité Champagne (CIVC) bear this out, with value sales in Japan up 21.3%, China/Hong Kong/Taiwan collectively up 26.7% (and China alone up a remarkable 76.7%), Russia up 31.4% and USA up 8.5%.

Barillère added that he didn’t believe the decline in the UK would be “too serious”, because “there is such an appetite for Champagne”, but predicted that any future growth would continue at the top end.