The sale of the house of Pommery to the Vranken-Monopole group, that was formally completed in June, is the fourth significant purchase over the past three years that has changed the pecking order in Champagne.

It propels Vranken up the Champagne league table with its first top ten international marque and gives the group the opportunity to compete head on with Marne & Champagne, Remy Cointreau and Allied-Domecq, whose own main brands - Lanson, Piper-Heidsieck and Mumm respectively - all currently outsell Pommery.

What's more it comes at a time when these brands are themselves trying to re-establish their identity, particularly Mumm, which has changed hands three times in as many years. Most of the major international brands have also had a hard time of it post-millennium in the wake of widespread over-stocking that resulted in profitable export orders stagnating or falling, right into the last quarter of 2001. De-stocking continued to be a feature of the important USA market in 2001, hitting the four brands that dominate sales there which are, in descending order of size, Moët & Chandon, Veuve Clicquot, Mumm and Perrrier-Jouet.

LVMH remains the dominant player in Champagne with the two strongest brands in Moët & Chandon and Veuve Clicquot, sales of which were put at 27.3m and 12m respectively in 2001. However LVMH group sales of Champagne, which includes Krug, Mercier, Ruinart and Canard-Duchene as well as Pommery, fell again in 2001 to 49.8 million bottles, having dropped by 9m bottles from 62.7m to 53.7m in 2000. LVMH's share of the total Champagne market also dropped from 22% to 21% in 2001 and that was before the sale of Pommery.

The unexpected sluggishness with which the champagne market picked up in 2001 -- originally excess stock was thought to have sold through by the end of 2000 - is well illustrated by LVMH's quarterly sales. They amounted to just €181m January-February, rose to €268m in the second quarter, lifted to just €336m between July-September, but finally picked up to reach €588m in the final quarter making €1,373m for the year. LVMH total wine & spirit division sales, this includes Cognac and other wines like Château d'Ychem, Cloudy Bay and Chandon Estates, fell from €2.336bn in 2000, to €2.23bn in 2001.

Contrary to many reports over the past two months in the light of the sale of Pommery to Paul-Francois Vranken's rapidly expanding Vranken-Monopole group, Marne & Champagne remains the second largest producer of Champagne with some 18.2m bottles sold during 2001, 6.1m of which were accounted for by the Lanson brand, the fourth biggest selling marque worldwide in 2001, only 200,000 bottles behind Laurent-Perrier.

The only other brand Marne & Champagne owns that is widely known is Besserat de Bellefon that sold 1.3m bottles in 2001. However, the Alfred Rothschild label, the leading seller in French supermarkets but not available outside France, accounts for a significant slice of the 10.8m bottles that are included under the Marne name.

It is only when it comes to group turnover that the new look Vranken-Monopole (ie including Pommery) comes near to Marne & Champagne, where group turnover was
?230m in 2001, according to deputy managing director Georges Alnot. If you add Vranken-Monopole's turnover of 2001, up an impressive 8.7% to ?138m, to that of Pommery's within LVMH - put at ?100m - it's actually slightly higher. Although perhaps Paul-Francois Vranken's recent statement that the new group will have a turnover of not less than ?230m gives a better idea of what is to come.

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Vranken-Monopole's bottle sales rose by 4.7% to 10.48m in 2001, with Heidsieck Monopole the largest individual brand contributing very nearly one quarter of this - some 2.6m bottles. Even if Pommery's annual bottle sales are put as high as 5.5m - they regularly topped this between 1995 and 1999 - the enlarged Vranken group only musters 16m bottles. However in reality Pommery's sales fell to around 4.5m in 2000 and further still last year, so that estimating total bottle sales for the group somewhere between 14.5 and 15m would be more accurate.

Pommery's decline at LVMH over the past few years reflects the fact that it had no obvious place within the LVMH Champagne portfolio. It was hard to find it a position in any market where it didn't compete head on with its far stronger sister brands Moet & Chandon and Veuve Clicquot. For Paul-Francois Vranken however, Pommery will become the top priority and he will be hoping to rebuild the brand that used to be the biggest seller in the UK.

In 2001 in the UK off-trade Pommery slipped to 13th place with a share of only 0.9%, although year-on-year sales were up by 10.7% in line with the market. Around two-thirds of Pommery's sales in the UK are currently through the on-trade, although this may change in the future as Vranken tries to rebuild the brand's volume. As when he bought Heidsieck-Monopole from Seagram, Vranken has secured a pretty good deal from LVMH. The price paid, believed to be ?175m, looks very reasonable when compared with the ?575m Allied Domecq paid for Mumm and Perrier-Jouet whose combined sales were not more than 2.5m bottles higher than Pommery's in 2001. And with over 20m bottles of stock included in the deal he has more than four years supply at current rates of sale.