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Delhi Wine Club

Posted: Saturday, February 13 2010. 14:13

French Support Fails to arrest Champagne Sales Drop

Despite a steady consumption of 181 million bottles at home, Champagne saw a sales drop of 9.1% in 2009 at 293.3 million bottles, with US and Japanese markets declining but a steady trend in Spain, Italy and UK where an unexpected boost during the last 2 months helped buffer the fall, with Valentine’s Day sales expected to maintain the trend.

Due to trading down to cheaper quality Champagne, the drop in value was even more at 17%, reports the official website of CIVC- Comité Interprofessionnel des Vins de Champagne. The decline was mainly by a drop in the sales to the rest of the world which at 41.7 m bottles was 25.1%. Besides the big drop in the US and Japan- two of the traditionally strong markets, there were also disappointing sales in the emerging markets of Brazil, Russia, India and China, according to the website.

Sales in UK went up by 3% both in terms of value and volume as the number of bottles sold in France was same as in 2008.The drop of 9.1 % is therefore, less than feared earlier. There is also some optimism that 2010 would be better for Champagne despite the fact that the Italian Prosecco has been making constant inroads due to the lower costs. With the grant of DOC status to a wider area last year and the docg up-gradation, it would be interesting to see if the trend to shift to the tank fermented bubbly for the second stage will continue due to its light and easily drinking style.

The recovery may already be too late for some Champagne houses. Piper-Heidsieck announced last Friday to lay-off 45 people, mostly in production, out of a staff of 160 in Reims. Owned by Rémy Cointreau, it hopes to offset some of the losses suffered in the first nine months of 2009. In a statement, Piper-Heidsieck president Anne Charlotte Amory said that the recession had hit sales hard and that the company would now focus on the production of prestige and special cuvees. The last layoffs were in 1992, reports Decanter.

Champagne market in India has seen a lackluster performance despite claims by the region-part of this could be due to the reported diversion of stocks sent for the Indian market by the producers in earlier years, showing inflated sales. In any case, the total market for imported sparkling wines is less than 400,000 bottles. The prime reason is that heavy taxes make it too expensive for non-celebratory occasions and the luxury goods market which is an important customer segment has had its own marketing problems due to recession.

Although the sparkling wine in Indian market is poised for growth, a reasonable chunk is expected to be chipped away by Prosecco and non-Champagne French wines like Bouvet- Ladubay, owned by the UB group, who are waiting in the wings to capture any increased share due to changing trends.


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