Laurent-Perrier faces pricing pressure

Laurent-Perrier faces pricing pressure

Laurent-Perrier has reported a revival in Champagne sales in its fiscal first quarter, but consumers have continued to put pressure on profit margins by opting for cheaper bottles.

The Champagne producer's net sales rebounded to EUR36.8m (US$47.5m) for the three months to the end of June, up 17% on sales of EUR31.2m in the same period of last year.

Its announcement offers further evidence that Champagne sales are regaining their fizz in 2010 after the global economic downturn hampered the sector's performance for most of 2009.

Laurent-Perrier said yesterday (20 July) that it was "encouraged" by its first quarter sales, even though they remained below the EUR41.8m achieved in the same period of 2008.

Pricing is emerging as the key challenge for Champagne houses in 2010 and Laurent-Perrier's figures did little to allay industry concerns.

Volume sales in the first quarter rocketed by 40%, driven by consumers trading down to cheaper bottles of Champagne and causing a 24% drop in Laurent-Perrier's price mix for the quarter.

Laurent-Perrier highlighted that its namesake brand expanded margins during the quarter and added that it expects price mix "to steadily improve during the coming quarters".

The group saw the strongest demand from the UK, US, Germany and Asia.