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Moet faces ‘serious’ supply problems

Moet et Chandon is facing serious supply issues, the director of the Champagne house has revealed.

Moet Hennessy, the wine and spirits division of LVMH, has unveiled another successful quarter – with 2007 revenue growth to date up 13%, profits in Asia up 24% and rose champagne sales up 42%.

But in terms of supply of grapes, ‘Yields are at a maximum and we will soon have our backs to the wall,’ Frédéric Cumenal told French newspaper Les Echos.

He said limited space for growing vines was a problem, as well as small growers storing up to 100m bottles of Champagne in their cellars to limit tax bills and provide a source of income for their retirement.

Patrick Le Brun, president of the syndicate that represents small growers in the region, told decanter.com, ‘We have an agricultural and not an industrial production. The big houses need to be more realistic about the ability to keep increasing grape supply over the coming years – there’s only so much nature can give.’

He agreed that some growers were keeping bottles in their cellars, ‘but the figure of 100m is far too high, and may be at most half of that. Everyone can do their part to ease these supply issues. Firstly, we need to change the fiscal regulations – to lower the taxes paid on stocks of champagne and improve the retirement provisions offered to grape growers. The negociants also have to be more realistic about what they ask for.’

A new rule has been introduced in the region for the 2007 harvest. Growers must save any excess must in years of good supply to put onto the open market in years of limited supply, which should help ease problems.

A spokesperson at the Champagne Bureau said, ‘Champagne is an AOC limited by its geographic boundaries – it’s simple mathematics that tells us if demand continues to grow, we will have difficulties with supply.’

Written by Jane Anson

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