Top 10 Champagne trends for 201213th January, 2012 by Rupert Millar
2. Prices will have to increase
Pricing has been an issue for Champagne in the last couple of years, as value went to the wall in favour of volume in some quarters, though the producers claimed this was not of their doing.
Sadly, as Simon Field MW, buying director at Berry Bros & Rudd, fears, if anyone thought that 2010’s festive reductions were bad, 2011’s may be worse.
Certainly the reports of Taittinger being sold for less than £17 a bottle when bought as part of a case raised eyebrows in many quarters – both sceptically in trade circles and with delight by customers as they calculated how much Champagne they could afford at once in the event of being snowed in again.
However, the serious side of these reductions is that, realistically, prices are going to have to go up. Base costs on raw materials and storage are increasing, as are grape prices.
Philipponnat notes that grape prices have been increasing with every vintage since the mid 1990s and that these costs can no longer be absorbed in profit margins. The other fact worth bearing in mind is that these rising costs have been absorbed into future price appraisals but are often yet to be felt in the actual marketplace.
As Philipponnat explains: “Since 1994 there has been an increase in price every vintage. If you take our NV, we hold more or less four years of stock, which equals four price increases in store. We will have to increase our prices come what may. It is impossible for us to absorb these increases in our margins. I estimate rises of 3-4% each year for the next three to four years. Champagne may lose volume in the process but there is no escaping from that reality.”