Sales pressures bubble over for Champagne

REIMS, France — Champagne is losing its fizz. For months, lockdowns put the cork on weddings, dining out, parties and international travel — all key sales components for the French luxury wine marketed for decades as a sparkling must at any celebration.

Producers in France’s eastern Champagne region, headquarters of the global industry, say they’ve lost an estimated 1.7 billion euros ($2 billion) in sales for this year, as turnover fell by a third — a hammering unmatched in living memory, and worse than in the Great Depression.

They expect about 100 million bottles to be languishing unsold in their cellars by the end of the year.

“We are experiencing a crisis that we evaluate to be even worse than the Great Depression” of 1929, said Thibaut Le Mailloux of the Champagne Committee, known by its French acronym CIVC, which represents some 16,000 winemakers.

Recognizing the urgency of the problem, the CIVC is launching unprecedented damage-limitation measures. Like oil-producing countries, the committee regulates the size of the harvest each year to avoid the kind of excess production that would cause bottle prices to plummet. At a meeting scheduled for Aug 18, it’s expected to impose a cap so tight that record quantities of grapes will be destroyed or sold to distilleries at discounted prices.

The prospect alarms smaller producers, who are more vulnerable than the big houses.

Anselme Selosse, of Jacques Selosse Champagnes, called it “an insult to nature” that Champagne’s famous grapes might even be destined to produce alcohol for hand sanitizer, as is happening in other regions. “We are to destroy (the grapes) and we pay for them to be destroyed,” Selosse said, referring to the industry as a whole.

“It’s nothing but a catastrophe.”

Decline in demand

“Champagne has never lived through anything like this before, even in the world wars,” Selosse added. “We have never experienced … a sudden one-third fall in sales. Over 100 million bottles unsold.”

The collapse in demand has put the winemakers and grape growers at loggerheads over how much bubbly should be put into bottles.

Traditionally, both sides negotiate how many grapes are harvested by the hundreds of Champagne growers each year, many of whom sell to merchants including big-name brands like Veuve Clicquot and Pommery.

“The growers want 8,500 kilograms per hectare and the houses want just 6,000 to 7,000 kg,” said Bernard Beaulieu, a grower in Mutigny, a village south of Reims, the hub of the Champagne region.

Major producers such as Vranken-Pommery predict that the crisis could last for years.

“It should not be forgotten that (Champagne) has lived through every single war,” said Paul-Francois Vranken, founder of VrankenPommery Monopole. “But with the other crises, there was a way out. For now, there is no way out — unless we find a vaccine.”

Vranken said the very essence of Champagne marketing — as a drink quaffed at parties and weddings — needs to be re-evaluated to reflect the new normal: Fewer festivities and a lack of celebratory group events.

Selosse said adaptability has served Champagne well in the past, helping it evolve from a dessert wine in the 19th century.

He even thinks the industry could move away from effervescence and be able to produce all sorts of wine, as it did in the past: red, white or still. In fact, literally no fizz.