Champagne supplies are beginning to run dry after the sector staged a 'remarkable' recovery from the economic downturn, according to luxury goods giant LVMH (Moet Hennessy Louis Vuitton).
Announcing 19% growth in wine and spirit revenues to €3.26bn during 2010, LVMH chairman and CEO Bernard Arnault said prestige cuvees including Dom Perignon and Krug had been the star performers.
‘We found ourselves in a situation where supply and availability becomes short,’ Arnault told analysts in a conference call. ‘You may remember that back in 2009 all the papers said that it was a Champagne crisis.
‘[Moet Hennessy president] Monsieur [Christophe] Navarre would come and see me and say “we have all this inventory – what should we do with all the bottles?”.
‘Some other companies were dumping their stock; we decided to buy more. But we didn’t buy enough and now with the recovery and resumption of the market, we found ourselves short.’
Champagne’s last two harvests have been restricted by generic body the CIVC (Comite Interprofessionnel du Vin de Champagne), out of fears of a continuing oversupply crisis and tumbling prices.
Meanwhile, Arnault distanced himself from buying the Piper-Heidsieck and Charles Heidsieck Champagne brands, which were put up for sale by owner Remy Cointreau late last year.
Asked about the company’s intentions, he replied: ‘Yes, we looked at that – but no more.’
Arnault also reflected on the buoyancy of the market for fine Bordeaux, contrasting the price paid for a bottle of Chateau Cheval Blanc in 1998 – €60 – with the 2009 vintage’s typical price-tag of €600.
Written by Richard Woodard