Focus - Champagne body keeps the fizz on ice
France's Champagne council is keen to mute celebration of a sharp rise in exports to the US market in the first two months of 2010.
The Comité Interprofessionnel du vin de Champagne has reacted cautiously to figures that show exports of the French bubbly to the US doubled in February and rose sharply in January, compared with the same period of 2009.
Demand for Champagne has fallen dramatically in the US during the global economic downturn, damaging producers' sales and profits.
"Traditionally, shipments of January and February are relatively small," CIVC spokesperson Daniel Lorson told just-drinks today (3 June).
"Nevertheless, these are the first positive months for nearly three years and following the festive season sales, this could show that the destocking process has come to an end. We are now waiting for a confirmation of this modest sign of recovery," he said.
Worldwide Champagne sales volumes rose 19.4% in the first quarter of the year on the same period in 2009, according to the CIVC.
But. full-year results from Laurent-Perrier this week showed how reliant the Champagne sector is on the summer and autumn months.
Laurent-Perrier reported an 18% rise in sales in the final quarter of its fiscal year, which runs from January to the end of March. However, its EUR31.2m (US$34.8m) sales in this period represented less than a fifth of sales for the whole fiscal year, which declined by 5% overall.
Shares in Laurent-Perrier fell amid concern on 2010. "Premium pricing went too far," said independent analyst Véronique Adam on her Pablofinance blog. "Visibility remains limited for the second half [of fiscal 2010-11]," said Adam, who was a food and beverage analyst with JPMorgan for 15 years.
The CEO of rival Champagne house Taittinger told a Reuters business summit this week that Champagne will retain consumers over the longer term "We will have less money. But, we will always have the time to make love and drink Champagne," Pierre-Emmanuel Taittinger told the Reuters Global Luxury Summit.
There is general consensus across the Champagne trade that, while volumes may recover quickly if consumer confidence continues to build, prices are likely to be under pressure for much longer.
In the UK, by far Champagne's largest export market, average prices rose by a fifth between 1999 and the end of 2008, but almost half of this growth was eroded during a few tough months in 2009, a CIVC index shows.
Global Champagne volume sales fell by 9% in 2009, to 293.3m bottles, while value sales fell by 17%, as stable demand in France masked steeper declines in key export markets.
US group Owens-Illinois has signed a "conditional agreement" with the Verrerie du Languedoc (VdL) to acquire its bottling plant in Southern France, which bottles Nestlé's Perrier and San Pellegrino wa...
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