Grape prices in Champagne set to rise again

Champagne has produced one of its biggest vintages ever, but grape prices are set to rise by as much as 5%, making 2018 the tenth consecutive year of increases.

News that prices are going up again this year in Champagne came about during a discussion on Tuesday this week in London with Bruno Paillard, who is chairman and CEO of Lanson-BCC and owner of Champagne Bruno Paillard.

When asked about the price of grapes from this year’s unusually productive harvest, he said that increases were in the region of 2 to 5%, with the higher rates arising in the most prestigious sites.

Should the rise be on around 3%, then the average price of grapes in Champagne will hit a new record of €6.2 per kilo, having reached the €6 mark last year.

Paillard told db that there was around 20% difference in the price of grapes from the southerly Aube area of Champagne and grand cru sites in the appellation, with €5.5 being the cheapest one could expect to buy grapes from this vintage, and as much as €8 being the upper end.

When asked why the price of grapes was increasing when the harvest had been so high-yielding, Paillard explained that it was due to the strong branded businesses in the region, commenting that it was not being driven by the growers.

Indeed, should the major buyers of grapes in the region agree to pay a certain price, then other producers are generally expected to pay the same rate to secure their supply for the long term – grape contracts are particularly sought-after in Champagne’s best areas.

“The growers are not asking for this [grape price inflation], but the big players who are successful, and who want to grow,” he said.

Speaking about yields specifically, Paillard recorded the unusually bountiful nature of the 2018 harvest.

“Champagne yields normally range from 1 to 4 volume-wise, with, at the lowest, 4,000kg/ha and at the highest, 16,000kg/ha, but this year, in some places, we went up by 5, so 20,000kg/ha or more,” he recorded, adding, “It has been incredible.”

However, because yields are limited in the appellation, even with an extra allowance to pick grapes to make wine to put into reserve, some producers had to leave bunches on the ground.

Because the law of the appellation stipulates that all grapes must be picked, Paillard explained that any grower or producer who would exceed the limit set for yields this year would resort to machine harvesters to remove the berries at the lowest possible cost.

With the Champagne winemaking process requiring whole bunches, every vineyard must be hand-picked, but if the grapes can’t be used for making wine, but must be taken from the vine, then the cheapest solution is to use mechanised harvesters to shake the berries off the vine, and leave them on the ground to decompose, according to Paillard.

Having witnessed such a practice in this vintage, Paillard told db, “I was shocked”, adding, “Mother nature should be respected if she wants to be generous”.

In terms of quantity and quality, Paillard said that this year’s vintage reminded him of 1982 and 2003, saying, “It is 75% ’82 and 25% ’03, with the first for the volume and the beautiful state of the grapes and the second for the extra maturity.”

Summing up on the excellence of the harvest, he stated, “We have everything to create the greatest wines for some time… there is no reason why we won’t succeed, you just need the will and the skill.”

Others in the region have previously told db that such a large harvest had been a blessing because it has allowed producers to replenish their reserves following last year’s much smaller vintage.

The Comité Champagne received a derogation form the INAO to add 4,700kg/ha to fill up the réserve individuelle (see explanation below).

This followed the Comité’s decision in July this year to set the available yield from this year’s harvest at 10,800kg/ha, which will produce the equivalent of approximately 315m bottles.

Paillard was in London this week to launch a sugarless Champagne called D:Z, which stands for dosage zero, referring of course to the complete absence of sugar in the dosage.

Average Champagne grape prices since 2006 (€ per kilo)

2006 €4.81
2007 €5.11
2008 €5.40
2009 €5.25
2010 €5.36
2011 €5.60
2012 €5.73
2013 €5.80
2014 €5.89
2015 €5.89
2016 €5.90
2017 €6.00
2018 €6.20 (estimate)

(Grape prices have now risen since 2009, meaning that there have been 10 consecutive years of increases.)

A note on Champagne’s réserve individuelle (RI).

While the maximum yield set by the Comité Champagne in 2018 for grapes to be made into wine from this vintage is 10,800kg/ha, a further quantity of bunches can be picked to put into a ‘reserve’, which consists of wine held in tanks for future use – i.e for blending to make multi-vintage / non-vintage Champagne.

Due to the bountiful nature of this year’s harvest, and the small crop last year, the Comité Champagne received a derogation from the Institut National de l’Origine et de la Qualité (INAO) to add 4,700 kg/ha to augment this back-up supply of wine, known as the réserve individuelle (RI).

However, because this reserve is capped at 8,000kg/ha, and the current average level of reserve in Champagne is around 6,000kg/ha, then it may not have been possible for many in the region to take full advantage of this derogation – they would have only been permitted to pick the equivalent of 12,800kg/ha (10,800kg/ha for making into wine from this year’s harvest and then a further 2,000kg/ha to reach a maximum reserve of wine in tank of 8,000kg/ha).

This situation, coupled with the fact that the conditions this year naturally produced yields in Champagne as high as 20,000kg/ha in some cases, would explain why certain producers were forced to leave grapes on the ground.

Read more

‘EXCEPTIONAL’ CHAMPAGNE HARVEST BEGINS

CHAMPAGNE LIMITS YIELDS TO 315M BOTTLES IN 2018

CHAMPAGNE HARVEST ‘HARDEST AND SHORTEST’ IN HISTORY

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