Champagne slowdown blamed on Eurozone

19th December, 2012 by Gabriel Stone

With Champagne reporting a 6.5% decline in shipments for the first half of 2012, a report has called on producers to reduce their reliance on European markets.

Champagne-Popping-350x350Arguing that it could take until 2015 for the global Champagne market to rebound as a result of Europe’s ongoing economic depression, Steve Charters, director of the chair in Champagne management at Reims Management School, claimed that the region’s long-term prospects would depend on its ability to adapt accordingly.

“Champagne makers know they must diversify their exports, which explains the development of emerging economy markets,” he remarked, adding: “But not all Champagne makers are able to diversify enough and a number of them will have to find a way to improve their European sales.

Recent Euromonitor analysis examined this conundrum facing Champagne producers, highlighting the fact that, despite growing demand from countries such as Nigeria, many Champenois continue to direct their marketing focus towards conspicuous consumption in Europe.

With so many producers fighting for share within economically stagnant European countries ­– the report notes that 80% of shipments in 2012 were within the Eurozone – Charters warned: “the image of Champagne tends to deteriorate gradually in these markets while other sparkling wines are upsold.

“In the long term, we could very well imagine the emergence of a competitor, one that would necessitate the Champagne industry to change the way it operates.”

This view echoes a report by Mintel, released earlier this year, which suggested that 2012 was likely to see sparkling wine sales overtake Champagne in the UK for the first time.

However, at the top end of the UK market, there were signs of growth, with fine wine merchant Bordeaux Index announcing that a steady release of high profile vintage offerings was helping it achieve record Champagne sales this year.

In support of his more downbeat overall assessment, Charters drew a direct link between Champagne’s performance and the economic climate, saying: “Sales of Champagne can be directly measured against changes in consumption and they are currently reflected by the economic crisis in the Eurozone.”

As a result, he speculated on the timescale for a European recovery and its likely impact on Champagne exports, offering the cautious prediction that “considering what we have seen in 2012, it is unlikely that Europe will see any growth in 2013. In line with this slow bounce back, Charters warned that full year results for Champagne shipments could reveal “an even more difficult year than 2011.”

“The Champagne market will not recover before 2014 or 2015. Looking back, the poor sales of 2012 are far from over and even suggest the figures resembling those of 1991,” he observed.

However, the Champagne Bureau balanced this gloomy outlook with a more positive picture of the region’s international performance and prospects. “While Champagne shipments for the first half of 2012 closed within a whisker of the volume for 2011, we expect Champagne to be up in terms of value growth,” remarked Françoise Peretti, UK director of the CIVC.

She also warned against reading too much into first half results, given the seasonal nature of the Champagne trade. “With 40% of Champagne sold between October and December, 2012 year-end Champagne shipment figures are expected to remain stable,” Peretti concluded.

A look at markets outside of Europe that will become increasingly important for Champagne will appear in this year’s Trends Report.

Leave a Reply

Your email address will not be published. Required fields are marked *

Please note that comments are subject to our posting guidelines in accordance with the Defamation Act 2013. Posts containing swear words, discrimination, offensive language and libellous or defamatory comments will not be approved.

Subscribe to our newsletters

2 x Buying Assistants

Berry Bros. & Rudd
Battersea and Basingstoke, UK

Temporary Christmas Sales Support - Wines & Spirits

Harrods
Knighsbridge, London, UK

Head of Wholesale

Hispamerchants Ltd
London, UK

Sales Manager

Hispamerchants Ltd
London, UK

National Sales Manager

Maverick Drinks
Field based, UK

Regional Sales Executive

EWGA
Gloucestershire, UK

Senior Content Writer

Rude Wines
Ledbury, UK

Events and Trips Manager

Berkmann Wine Cellars
London, UK

The World Bulk Wine Exhibition

Amsterdam,Netherlands
20th Nov 2017

The Drinks Business Green Awards 2017

London,United Kingdom
20th Nov 2017

The Global Spirits Masters Lunch

London,United Kingdom
1st Dec 2017
Click to view more

Green Awards 2017

Deadline : 25th October 2017

The Global Riesling Masters 2017

Deadline : 30th October 2017

Click to view more

Champagne Masters 2017

The only Champagne blind tasting in the UK, the competition will reward the best wines in the following categories:

The Global Rosé Masters 2017

With wines from the palest of pink to almost ruby red, bone dry to almost cloyingly sweet, reductively handled to barrel-aged, as well as gently spritzy to fully sparkling.

Click to view more