French wine exports may be falling, but there is a sparkling exception to the prevailing gloom, as sales of champagne fizz with health thanks to a growing thirst for it abroad, especially at this time of year.
French drinkers remain the chief clients for the legendary tipple, accounting for 180-million of the 300-million bottles sold each year, but they are consuming less.
”During the first 11 months of the year, the drop is of 2,5%,” said Daniel Lorson, of the winemakers’ organisation the CIVC.
It is not that French consumers are shunning the bubbling nectar, he says. Rather, producers are concentrating on sales abroad where drinkers are ready to dip deeper into their pockets.
Exports to the European Union should rise by 3% this year and to the rest of the world by 4,9%, according to Yves Benard, president of the champagne houses’ association.
It is a trend that has been apparent for ”four or five years” and is becoming more marked, he says.
Laurent-Perrier, which does two-thirds of its business outside France, saw sales to the United States and Japan soar by 35% in the first part of this year.
Much of the French wine industry is in difficulty, largely because of overproduction, but champagne is produced in limited quantities.
In 2004, only 31 800ha were used for production, all in the Reims region of north-east France, whereas the Bordeaux region alone has 123 000ha of grapes under cultivation.
Given the choice, growers prefer the bigger profits to be made outside France to domestic sales. Export prices are 30% higher, a study by financial analysts Precepta found recently.
”There is so much export demand that it would be a shame to give up the margins,” said Lorson. ”Why fight it out in France with discounts and price cuts when you can sell the same bottles abroad?”
The more so because there is price resistance at home. In the early 1990s, grape producers forced a 15% rise in the amount paid for their fruit, champagne prices rose and consumption fell by a quarter.
Furthermore, ”the French buy non-vintage brut [dry], the basic wine, whereas in places such as the United States and Japan they buy upmarket vintage brands” with a bigger profit margin, said Lorson.
Britons forget their francophobia long enough to swallow 30-million bottles of fizz a year, followed by the Americans (18-million) and the rest of Europe, but Japan, Singapore, China and Russia are showing an increasing taste for the bubbles, ”even if quantities are small”, said Benard.
The sector is promising, even if it requires heavy investment. A process of concentration is under way and the big five (LVMH, Lanson International, Pernod-Ricard, Laurent-Perrier and Vranken-Pommery Monopole) account for 43% of the market.
This year, Mumm was acquired by Pernod-Ricard while Taittinger and Lanson International are on the point of being sold after intense negotiation. — Sapa-AFP