Champagne shipments worldwide fell by over 20% in October, according to the region’s representative association, the CIVC.
As the credit crunch continues to affect sales, exports to Europe were down 24%, and shipments everywhere else – including Japan, the US, Russia and China – fell by 23%. Sales to the French domestic market also dropped by 20%.
‘People are thinking about their discretionary spend on all luxury goods and that is adversely affecting sales of Champagne, excluding the own label sector,’ said Paul Beavis, managing director of Lanson UK.
‘November was clearly not that great.’
While year-on-year sales as of September 2008 were still up by 0.1% thanks to the boom the same time last year, October 2008 showed a drop of 6% over the year – surpassing the CIVC’s estimate that overall sales in 2008 would drop by around 5%.
They now predict a fall of around 34m bottles – or at least 10% – to 300m.
The end of the year is particularly important for Champagne, as it accounts for around two thirds of annual shipments.
‘We hope that the brutal cooling down of the Champagne economy will make the grape market healthier and stop growers bottling excess production, encouraging them to sell more of their grapes to the houses that “add value”,’ said Charles Philipponnat, chief executive of the eponymous house.
‘It may be painful in the short-term but this will good for the future of Champagne, for quality and for consumers.’
Beavis noted that while there hasn’t been the same level of promotion as in November 2007, ‘we are waiting to see if anything does break. The supermarket wars are out of our control and Champagne is still a footfall driving category.’
UK supermarket Sainsbury’s has slashed the price of six leading brands of Champagne to just £15 (US$22), with some – including Lanson Black Label, GH Mumm and Piper-Heidsieck – reduced by over £10 a bottle.
Written by Giles Fallowfield