Recession 'could help Champagne'

Published: 20 March, 2009

The recent fall in Champagne sales caused by the global financial crisis could help Champagne producers to balance their stocks, according to the head of the Union of Champagne Houses.

Speaking at a press conference in London this week, Ghislain de Montgolfier said the Champenois were "still very confident about sales of Champagne" despite a fall in exports of nearly 5% in 2008, and a difficult start to 2009.

But he added a continued fall in sales "could help us a little bit" after a period of sustained growth over the past decade had put pressure on the Champenois to meet demand.

Production in the 35,000ha appellation is nearly at its peak, and the planned expansion of the growing area will not be commercially viable until 2019 at the earliest.

And de Montgolfier said: "Even without the crisis we were growing too fast. We are only able to grow by 2% a year for the next 12 years."

Despite de Montgolfier's claims, the mood among importers and shippers at the annual Champagne tasting organised by generic body the CIVC in London this week was unusually downbeat.

Shipments to the UK in 2008 were down 8% to just under 36 million bottles, with Nielsen data suggesting a fall in sales of 11%. And most Champenois expect things to get much worse before they get better.

"We are prepared for a difficult couple of years," said Laurent Gillet, president of Champagne Jacquart. "Champagne growth is linked entirely to that of the economy, and until that starts to improve we cannot expect to grow sales."

But shippers denied the difficult conditions would put downward pressure on prices. Andrew Hawes, managing director of Mentzendorff and chairman of the UK Champagne Agents Association said: "There is no excess stock waiting to be discounted and sold."

Many shippers also shrugged off the recent rise in sparkling wine sales, which are now almost level with Champagne by value according to Nielsen. "In a recession the people who drink Champagne stop drinking Champagne. But they do not go to sparkling," said Veuve Clicquot chef de cave, Dominique Demarville.

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