Vranken-Pommery Monopole leads Champagne fightback

Vranken-Pommery Monopole leads Champagne fightback

Vranken-Pommery Monopole has seen its share price rise after the Champagne house reported strong trading for 2010.

Vranken-Pommery Monopole's shares were up by 5% on the Paris stock exchange yesterday (25 January). The rise reflects greater optimism in Champagne's potential in 2011.

The French group reported core Champagne sales up by 6% for 2010, to EUR286.8m (US$392.2m), which means that the group has largely returned to its pre-crisis sales trajectory. Champagne sales overtook those in 2008 by EUR1m.

French broker Oddo today lifted its target price for Vranken-Pommery's shares to EUR40 from a previous EUR36 and advised investors to buy. The Champagne producer's share price had slipped back slightly by lunchtime today, at EUR34.65.

Oddo highlighted that the group's Champagne sales increased in momentum during the group's fourth quarter, which included the key Christmas selling period.

France's Champagne industry is expected to report a strong rebound in demand for 2010. A slump in export markets led to a 9% drop in volume sales in 2009, to 293m bottles. However, Vranken-Pommery said yesterday that it expects the industry to have sold 319m bottles in 2010, just shy of the 323m sold in 2008.

Pricing has been a strong concern for the sector in general, but Vranken-Pommery said that its own price/mix increased by 2.7% in 2010. It said that net sales are expected to rise again in 2011.