Champagne report 2014: Seizing the initiative

Strong competition

Champagne-350x350While the economic environment in the UK might favour a temporary shift from Champagne to cheaper sparkling alternatives, Hawes is concerned that drinkers might not come back to Champagne when times are better. Looking back to the recession of the early ‘90s in the UK, he says that there was “a boost in sales of Australian sparkling”.

However, he remarked: “after that recession, people traded back up to Champagne.” Now he says: “While there appears to be an economic upswing [in the UK], there are also more quality alternatives, so Champagne shouldn’t take it for granted that the past will repeat itself.” What does he propose? “Sparkling wine is a real trend; it’s here, it’s massive, and we need to accept that and look for the positives. It’s a massive opportunity for Champagne, an opportunity to communicate to the new consumer what’s so special about Champagne.”

Champagne-Project-2013But Project 2030 is not just a question of ensuring Champagne’s output is superior to the competition, and promoting the region’s quality credentials. In fact, there’s a third reason for instigating the initiative, and that’s a threat from within Champagne. This comes from the supply of inexpensive bottles to major retailers where they are sold at very low, even below-cost prices under buyers’ own brands or exclusive labels, damaging the upmarket image of the appellation. For example, Fabrice Rosset, chairman and CEO at Champagne Deutz records Champagne on sale in France last year for the equivalent of E7.78 a bottle.

Although selling alcoholic drinks below cost is against the law in France, retailers circumvent legislation using coupons to reduce the cost of groceries bought in a store along with any booze.

Such a technique was used in 2012 too, allowing retailer Leclerc to sell Champagne in a half price loyalty card deal which allowed shoppers to effectively buy a bottle for E5.45. While E10.90 would buy them a bottle of Champagne, they received a E5.45 voucher to spend on food in-store the following day. The Champagne for this offer, the Laurence D label, was supplied by Nicolas Dubois of Pressoirs de France, which was declared bankrupt later that same year, before being bailed out in August 2013 by Michel Reybier, a Swiss-based French businessman, and owner of Bordeaux second growth Château Cos d’Estournel. Furthermore, because such low-priced deals are commonly fuelled by sur latte trading, these inexpensive labels may have multiple sources, and as a result, a single label may contain wine of different quality.

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