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Champagne unable to meet rising demand

While the rest of France is reeling under over production of wine, Champagne is the only region where the producers are unable to meet the demand, reports

In contrast to still wine, the Champagne industry is actually struggling to satisfy demand. The resulting pressures on grape supplies and prices have encouraged many producers to focus on the high margin, lower volume vintage and prestige cuvee sectors as they seek to maximise their returns. As a consequence, the value of Champagne shipments is rapidly outstripping volume.

Demand for Champagne remains highly polarized with France , the UK and US sharing three quarters of global volume. The explosive UK Champagne market has confounded many analysts. Volumes have almost doubled since the post millennium slump though there are now signs of a slowdown, which is partly due to higher prices but is also a result of the strategies being adopted by many brand owners. Allied Domecq has placed greater emphasis on value and on-trade space (restaurants) with Pernod Ricard likely to follow suit.

The emerging markets of Russia, China and India have also advanced spectacularly, contributing towards an 8% increase in exports in the first seven months of 2006. Laurent-Perrier's Yves Dumont echoed the thoughts of many producers in stating that "we simply don't have the supply to fulfill such growth... we would prefer 1-2%". Laurent Perrier is being marketed in India aggressively by Global Tax Free Traders.

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