Exclusive - GLOBAL: Champagne discounts "killing the drink", warns Pernod Ricard exec

By | 21 June 2013

Pernod is investing in Brazil

Pernod is investing in Brazil

A Pernod Ricard Champagne regional head has branded heavy European discounting in the category “totally unacceptable”.

Hughes Le Marié, Pernod's Americas and Western Europe director for GH Mumm, said prices as low as EUR6 (US$8) are “destroying the dream” of Champagne. He warned that the sector's trade body will tighten appellation rules in response.

Speaking exclusively to just-drinks today (21 June), Le Marié said: "The history of Champagne is unique but when people see they can buy a bottle for the same price as three bottles of Coca-Cola, you are on the way to killing the drink.”

“I'm pretty sure it won't happen again because the CIVC (Comité Interprofessionnel du Vin de Champagne) will be even more careful than before about not giving the appellation too easily.”

Le Marié said the low prices, which were at their lowest in France earlier this year, did not affect Mumm but could hurt smaller labels.

“It is totally unacceptable and these people are surely not playing on quality and taking the risk of destroying the dream that we have built around Champagne,” he said.

Le Marié said Pernod is investing strongly in its other Champagne brand Perrier-Jouët in Brazil, where it hopes sales can help make up for a slumping domestic market despite a slowdown in economic growth.

“The economy has slowed down to 1%, but the future is certainly less bright in France than in Brazil,” he said. “In Brazil 1% growth is an accident, in France it is the rule.”

Perrier-Jouët is Champagne's fourth-biggest label in Brazil in a market "dominated" by LVMH's Moët & Chandon and Veuve Clicquot, Le Marié said.

According to figures last week, Champagne sales fell 17% in France in March, but exports outside the EU edged up. 

Expert analysis

Global market review of Champagne – forecasts to 2016

Some of the issues and challenges addressed in the previous edition of just-drinks' Champagne report continue to influence a category struggling to grow. Recovery from economic downturn and tumbling sales was evidenced in 2010 and part way through 2011, only to be replaced with a further slow down at the end of that year and continuing into 2012. This has been more prevalent in the western European countries. Elsewhere there has been better sales performance, noteably in the US and Japan, significantly in Australia and not forgetting the burgeoning economies of Asia and Greater China. However, even these new markets can only go part way to offset the situation in the more mature markets, to such an extent that total Champagne shipments are expected to rise only slightly during 2012. According to the report, pronounced growth is unlikely until 2015.|

Sectors: Emerging markets – BRIC, Wine

Companies: Pernod, Ricard, Perrier, LVMH

View next/previous articles

Currently reading -

Exclusive - GLOBAL: Champagne discounts "killing the drink", warns Pernod Ricard exec

There are currently no comments on this article

Be the first to comment on this article

Related research

Pernod Ricard: Premiumization and decentralization fuelling growth in mixed macroeconomic environment

Over the last 10 years of rapid acquisitions, Pernod Ricard has built a strong portfolio of premium brands on a global scale. Most of its brands enjoy a leading position in international markets. The company has adopted a decentralized operational st...

Pernod Ricard Groupe in Spirits (World)

With very limited resources for expansion through acquisition until at least 2015, Pernod Ricard’s key focus has to be through organic growth. The profile looks at how its current portfolio of brands is positioned and what it should do to maximise it...

Pernod Ricard Groupe in Wine (World)

As well as ranking third in the global spirits market, Pernod Ricard is the world’s fourth largest wine producer. This profile analyses the company’s efforts to adapt its wine offer to challenging and changing conditions in core markets and to levera...

Related articles

Editor's Viewpoint - Carling British cider: Brit-Ish

While the Advertising Standards Authority has ruled in Molson Coors' favour this week, I can't help feeling that the brewer is not as far in the right as it would believe.

just the Ten - Quotes of 2013

With the end of the year looming, just-drinks is running a series of 'Top Tens of the Year' in the run-up to Christmas. Here are just-drinks' ten favourite quotes in 2013.

just the Ten - Top Interviews of 2013

With the end of the year looming, just-drinks is running a series of 'Top Tens of the Year' in the run-up to Christmas. Here are the ten most read interviews on just-drinks in 2013.

just-drinks tagline

Not a member? Join here

Decrease font sizeDecrease font sizeDecrease font size Increase font sizeIncrease font sizeIncrease font size Comment on this article Email this to a friend Print this page