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The price is right

Published:  23 July, 2008

Last year, judges at the Gosset awards, a competition to find the best Champagne list in the UK, found evidence of what they described as shocking, greedy pricing which does little to encourage the uninitiated to try Champagne'.

Such thoughts were collected together in a press release announcing the winners, so that Gosset would be linked in the minds of journalists and their readers with the country's top restaurants.

But while making it more likely that the story would be published, it wasn't the ideal message to be falling into the hands of consumer writers, who otherwise promote the merits of drinking France's finest sparkling in fashionable dining rooms. Gosset received some exposure for its brand, but it's hard to argue that Champagne benefited.

It was a curious observation to make, too. Champagne is often marked up far less than other wines in British restaurants, at around a factor of one-and-a-half or two. By comparison, still wines tend to be increased by three-and-a-half or four times. If there are culprits to finger, it should be the lower-priced wines in the retail pub outlets.

Make no mistake, most restaurateurs would charge high prices for Champagne if they could, but they can't: The wholesale price makes it impossible to apply a regular mark-up because that takes it into silly money,' says Alessandro Marchesan, sommelier and buyer at London restaurant Zuma.

In fact, one of the restaurants on the Gosset short list, Oxfordshire's Le Manoir aux Quat' Saisons, run by celebrity chef Raymond Blanc, does mark up according to regular wine price increases, and it's noticeable. Bollinger is 90, Laurent-Perrier 68, Mot & Chandon 79 and Veuve Clicquot 78. Sommelier Xavier Rousset justifies it on the basis of Champagne being a top wine. I am treating Champagne as a wine, with the same demands on handling and storage as any other fine cuve'.

But Homewood Park, a hotel owned by the Von Essen company near Bath in Somerset, is one of many that charges around 47 for a bottle of Laurent-Perrier, 48 for Mot & Chandon and 54 for Bollinger. Most sommeliers now accept that they are making a good cash margin on Champagne, even if the percentage return annoys the accountants. Neleen Strauss, of Vivat Bacchus restaurant near London's financial district, the City, tells of the role Champagne plays for her: I'm not wildly excited when I sell a bottle of Champagne, because I don't make such a high margin. But at least a glass before dinner puts people in the right frame of mind to spend more thereafter.'

Gosset judge Steven Spurrier, also the organiser of the recent Judgement of Paris tasting, is nonetheless adamant that Champagne prices are too high, if not for the 750ml serving. There is some serious gouging going on on by-the-glass, because restaurateurs want the profits from Champagne that they can't get via a bottle. People know what the best-known Champagne brands cost in the supermarket, so the on-trade is using by-the-glass to rake it all back. Top hotels are particularly bad in this regard.'

In other words, the advantage of charging a high price for by-the-glass servings is that people often don't know, or can't be bothered to work out, what a certain figure translates into for a whole bottle. Fair enough; if they can get away with it, good luck to them,'

says John Clearly, on-trade sales manager for Laurent-Perrier. Perhaps, however, the Champenois should be less sanguine about such high prices.

Stepping stone

By-the-glass is important to the Champenois as a recruitment tool', says Dom Prignon brand manager Mark Harvey. It brings in new groups of consumers and acts as a stepping stone.' If per-glass servings are an instrument used by the main houses to have people taste their Champagne then it's important to maintain the right calibration. By this measure, Gosset Grande Rserve NV at 15.50 per glass at the Hampshire hotel Chewton Glen, when the wholesale price per bottle from the Wine Library is 28.50, does not seem at all well pitched. It's in line with wine in terms of mark-up but out of sync with by-the-glass wine prices - for example, you can buy a serving of the excellent South African winery Buitenverwachting's Chardonnay for 8.

Nonetheless most top brands are now available by the glass. Before the 1990s, the brand managers of Dom Prignon and Bollinger abhorred the idea of serving it casually before dinner in such a way. It was seen as not at all the right image to be conveying. Times have changed and Krug can be found in 20 venues this year compared to 12 in 2005. The Ros is 50 a glass at London restaurant Sketch.

And the change, according to Barbara Anis, brand manager for Piper Heidsieck and Charles Heidsieck, has generally been beneficial. She thinks that the price of her brands by the glass helps them to maintain a premium image, while also being accessible. We're about 8-10 by the glass in most restaurants, so we're right in line with the competition - a good cocktail or a glass of wine.'

For sure this is competitive with other drinks, as long as people ignore the fact that Champagne doesn't come in the same-sized receptacle. A glass of wine in a restaurant generally buys 175ml; for Champagne it's mostly served in a 125ml size. Furthermore, Champagne was never included in any weights and measures acts, defining how much should be served. That means any amount can be poured. How long before people notice? Lynn Murray, marketing manager at Hatch Mansfield and thus responsible for Taittinger, says that people don't appear to do the maths when they have a glass of Champagne', and it wouldn't matter if they did. They see Champagne as a treat. Price doesn't come into the equation in the same way that it does for wine.'

This seems to be the case at London's Ritz hotel. Bruno Murciano, head sommelier wouldn't dream of asking less than 10 for a glass of Champagne. People who come here want to spend money. Below that and you're in the realm of Cava or Prosecco.' That means that even the Ritz's own-brand Champagne, made by Jacquart, is 14.

Fancy a bottle of own-label Champagne at 63? Most of us would pass, but then city-centre hotels attract tourists who don't know what they're spending, and the Ritz more than most.

According to John Clearly at Laurent-Perrier, reducing a glass of Champagne in Vertigo [at the top of the former Natwest Tower] from 13.50 to 11.50 is not going

to have an effect, because a discount isn't what switches on the average city financier. And he probably isn't spending his own money anyway'.

In fact, costing a lot is positively a good thing, believes Simon Leschallas, director of Bollinger UK. I'd much rather have Bollinger selling too expensive than too cheap. We want to be seen as the pinnacle and a high price contributes to that.' At Royal Ascot one year, the price increases that Bollinger was putting through at the time made Bollinger's RD wine more expensive than Krug in the corporate tent. The caterers were convinced that this might kill sales of RD and drew Leschallas' attention to the problem. Shouldn't the cost per glass be brought down? Not really said Leschallas, and over the course of the meeting RD went on to sell more than Krug.

So the price is right for the major houses and the public are happy too. It may be wrong for Champagne to cost that much, but who else apart from Steven Spurrier is complaining? Well they're not protesting loudly, but the implication of many wine lists is that sommeliers aren't particularly happy. The fact that even the top places carry just three Champagnes by the glass shows they're not falling over themselves with enthusiasm about the range of this type of sparkling wine from north-east France.

Partly this is for practical reasons. One problem with serving Champagne by the glass is wastage - all those lovely bubbles being lost as soon as the bottle is opened. That has been partially solved by new preservations systems, although these are by no means foolproof. However, any decent barman should be able to sell bottles through if they're a bit clever, reckons Great Eastern Hotel buyer and head sommelier Jelle Marti: If someone comes in late on wanting a glass of Ros Champagne and you're going to have to open a fresh bottle, offer a glass of Vintage from one that's nearly finished, and charge them the price of a glass of Ros.'

More of an issue is that many venues run smoother when fewer glasses are served: It's better to sell bottles, it speeds up service, people top their own glass up so we can pay less attention to them and provide good service to other people where it's needed,' says Steve Manktelow, operations manager of the group that owns Boujis nightclub, a favourite haunt of Princes William and Harry, and the Eclipse group of bars. A bottle ties people into finishing it, so they will stay longer and spend money on food or other people will join them and they'll drink more wine too.'

Vintage or NV?

But much more of a factor for restaurant buyers is something far simpler: flavour. When it comes to Non-Vintage the bigger brands seem to concentrate on marketing rather than really caring what goes into the bottle,' Marti believes. That leads her to list a few, smaller brands by the glass, such as

De Venoge and Henriot, as well as the tiny producer Jerome Dehours. Top sommeliers clearly need to be taught the varying qualities of different NV Champagnes. But they are less receptive thanks to an approach that suggests some top brands assume they will be on every wine list. Every year there's a 2-5% price increase after the Chancellor's budget. They all come up with the rubbish excuse that the vintage is bad and stocks are down,' says Marti, yet they have goodness knows how many millions of hectolitres of reserve wines in their cellars. You don't get messed around like this by the smaller guys.'

Sommeliers are also filling their by-the-glass lists with Vintage from the main brands. There are so many aromas in Vintage Champagne: toasted hazelnut and lovely brioche flavours that you can exploit,' says Gale Later, restaurant manager at Lords of the Manor hotel in the Cotswolds. Non-Vintage on the other hand tends to be balanced, with good acidity and lightly floral, but you can't say much more than that. I'm happy to explain to customers why Vintage costs more, and I intend to move Vintage away from flutes to the more rounded glass that you have for wine.'

Patricia Parnell, Krug Champagne's UK spokesperson, believes that the more-than-doubling of Krug for a by-the-glass listing by London's restaurants in the past year is down to the way it tastes. This wine has six years in the cellar, the same amount of time as many Vintages.

Ultimately, sommeliers in the UK need to be persuaded that NV Champagne has sufficient variety to merit a strong 10-15 by-the-glass list, frequently the number of still wines available in this size. One method, the by-the-glass promotion, is enthusiastically embraced by restaurants seeking good Champagne for their customers at a lesser wholesale price, albeit temporarily. Alessandro Marchesan sold out of Dom Prignon by the glass at 30 last month at Zuma. But while this seems to benefit the restaurant, it's less clear that a promotion does anything for the brand. John Clearly has a gut feeling that promos do work, but we don't have any definite evidence that that is the case'. This is strangely equivocal: if one of the largest-selling brands in the UK isn't sure that they are valuable long term, the others certainly won't know.

Promotions don't always convert sommeliers to the cause, either: Champagne is just Champagne,' maintains Marchesan at Zuma. To many people it's so much more than that - Vintage, Ros, Blanc de Blancs, even old vines Blanc de Noirs in the case of Bollinger. But until Marchesan sees Champagne as a wine, rather than a commodity, he won't understand just why he should sell more of it rather than anything else, including his own country's version of a sparkling wine, Prosecco.

The price of a glass of Champagne may be an issue for the judges at the Gosset awards, but a glance at any list in the UK will show that the real problem is the number available in this smaller size.