Champagne Market Goes Flat Amidst Economic Trouble In Europe

PARIS -- Europeans are finding fewer reasons to pop open a bottle of Champagne as another year of economic troubles and high unemployment saps the region's appetite for the finer things. But while the latest industry figures show that sales might be on the wane in Europe, other markets, particularly Japan and the United States, are developing a taste for a glass of bubbly.

In what is certain to be bad news for the vineyards, France ? Champagne's largest market ? is drinking fewer bottles. Sales of Champagne for the country were down 4.9 percent, and 5 percent elsewhere in the 27-country European Union, in the first nine months of 2012 compared with the same period in 2011, according to CIVC, the national association of growers and producers of the wine.

Nineteen months of rising unemployment and growing fears that the worst is yet to come have taken their toll on France ? nearly seven in 10 French are worried about their country's future, according to a recent poll.

"The French are pessimist by nature," said Antoine Chiquet, whose family has been producing Champagne for three generations and wine for eight. "We had a difficult election, we're in an economy where Europe's foundations are being questioned."

Nonetheless, the country managed to drink 175.7 million bottles of Champagne from Nov. 1 2011 to Oct. 31 2012, according to CIVC ? enough for nearly 3 bottles a year for every man, woman and child but about 10 million bottles fewer than the previous year. In contrast, the U.S. consumed enough sparkling wine for about 1.5 bottles per person in 2010, the latest figures available from the California-based Wine Institute.

But while the news out of France and Europe is bad, CIVC figures show export sales were up 3 percent in the first three quarters of the year. Top markets included the U.S., Japan and, to a lesser extent, China. A total of 19.4 million bottles of Champagne went to the United States and 7.9 million went to Japan ? the only two countries outside Europe in the top seven export markets.

Takayasu Ogata, a Tokyo-based sommelier, said Champagne and sparkling wine consumption is climbing in Japan at a time when overall wine demand peaked about 2000. According to the French figures, Champagne consumption alone was up nearly 7 percent over a year there.

"Both individuals and restaurants are taking to Champagnes with personality, including those that are from small makers but taste good," he said.

Lower price is another reason. Gone are the days when a bottle of Moet & Chandon went for 5,000 yen ($60) or more in Japan. These days, you can get real Champagne for as little as 2,000 yen ($25).

Of course, for those with rich tastes and a budget to match there are still lots of expensive Champagnes, selling for 10 times that, according to Ogata, who works at Venture Republic, an Internet retailer, and is in charge of wines.

Beer remains the drink of choice for many "salarymen," but younger people and women are taking a liking to Champagne, Ogata says.

"It's about the bubble ? a sense of gorgeousness," he said in a telephone interview. "There's that thrill to opening up a bottle of Champagne."

China is also emerging as a potentially strong market for a glass of fizz, although the numbers remain small. In 2011, the latest figures available, it ranked 19th in export markets for Champagne, apparently because consumers are less discriminating about precise origins. According to an EU ruling, only sparkling wine made in a particular region in northeast France is allowed to carry the name Champagne. The United States makes some exceptions, as long as the labeling is clear.

"People enjoy the `boom' moment of opening sparkling wine. It is fun. It offers a more festive atmosphere and it tastes good," said said Yu Ming, a 29-year-old who operated a bar in Beijing's Sanlitun nightlife district until 2010. In China, he added, "people call all sparkling wine Champagne. They don't care where it is from or whether the fermentation is inside the bottle."

The sales manager at the BHG supermarket in a luxury shopping mall in Beijing confirmed that Champagne budgets are largely out of reach in China, saying most customers at the chic store will instead choose sparkling wine: "The most expensive Champagne is 7,800 yuan ($1,250) a bottle at my store, but the most expensive sparkling wine is only 268 yuan ($43)," said the manager, who gave his surname, Hou.

Chiquet, whose label Gaston Chiquet produces about 200,000 bottles a year, said France and Europe generally will remain the most important markets for Champagne. But for the numbers to climb again "we'll have to rediscover optimism."

"Champagne remains a drink for celebrating the big events of life," said Chiquet. "Happily for sales, at the end of the year, the French rely on tradition. Still, we're not going to catch up. Unfortunately, what's lost already is lost."

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Associated Press writer Yuri Kageyama in Tokyo and researchers Fu Ting in Shanghai and Flora Ji in Beijing contributed to this report.

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Source: http://www.huffingtonpost.com/2012/12/28/champagne-market_n_2378046.html

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