French retailer price battle 'threatens' Champagne image

  • Thursday 14 November 2013

Champagne producers have warned that a price war between two major French supermarket groups, Carrefour and Leclerc, risks damaging the region's image.

French supermarket Champagne

Both Carrefour and Leclerc have this month offered deals via their store loyalty cards that have respectively seen Paul Francois Vranken’s Premier Cru fall to just €7.78-a-bottle (US$10.5), down 70% on its previous price, and GH Martel at €8.45 per bottle, down by around half on its earlier price.

The offers follow several price cuts on Champagne in general in recent weeks, suggesting that weak consumer spending power could exacerbate traditional pre-Christmas discounting.

‘The price is nearly cheaper than Prosecco,’ Michel Letter, head of Pernod Ricard-owned GH Mumm and Perrer-Jouet, told decanter.com

‘When they see this, consumers may think, “is it really Champagne?” Something must be wrong with it at this price. It is not the producer but the supermarkets doing it, trying to attract customers. They don’t care about the effect, but in the long-term Champagne’s image will be damaged.’

Selling food and drink products as loss leaders, or below cost price, is illegal in France.

Yet, some in Champagne believe that the two supermarkets have used their loyalty card schemes to sidestep the rules. It takes around 1.2kg of grapes to produce a 75cl bottle of Champagne and a kilo of grapes costs at least €5.50 – before one adds the cost of pressing, winemaking, packaging, disgorgement and shipping.

When contacted by decanter.com, neither Leclerc nor Carrefour was available for comment.

Thibaut Le Mailloux, spokesperson for Champagne’s governing body, the CIVC, told decanter.com, ‘the objective of such promotional offers are, from the retailer’s perspective, to drive an increased traffic to their stores thanks to a special price offer on an iconic product.

‘However, such prices disturb the consumer’s set of references, and are not good for the image of Champagne.’

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