There is a champagne crisis threatening to pop at the moment, according to an Economist article.
The main point of this thought-provoking article is that when the good times rolled, everyone was celebrating with a sparkle. French Champagne houses such as Veuve Clicquot and Moet et Chandon owned by LVMH, which has just over 18% of the global champagne market, were negotiating to buy more grapes from smaller growers to feed demand. But it’s amazing how much can change in a small period of time. Now, major champagne houses seem to be backing off. “According to the Comité interprofessionnel du vin de Champagne (CIVC), a trade body, champagne-makers’ sales fell by 23% in the five months to May relative to 2008."
The article also stated, "Each year the CIVC determines how many grapes the champagne houses must buy from the growers. In 2008 it opted for a high level of 14,000 kg for every hectare farmed. This year the champagne houses, looking for a way to reduce stocks, are pushing for just 7,500 kg a hectare..." Ouch, that's a lot of excess stock. In the good times, some growers held back from selling their grapes to some of the key houses to prevent them from producing too many bubbles, keeping it a little more exclusive and luxurious perhaps. Now that there’s an oversupply, I see sour grapes on the horizon… and this time it's the growers turn to gripe.
In the past few months, popping a champagne cork in public may have been seen as a bit ostentatious given the fiscal environment, but perhaps indulging in private has become the new M.O. of many corporate types? Or has it become twist and pour sans bubbles in celebration; shhh, stealth and sleek? Where to now? Well, the light is starting to shine brighter on the economy, so perhaps by the year’s end there will be just a few more things to celebrate… publicly.
Article by: Melinda O'Rourke
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