Champagne faces down critics and plans for growth

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A delimited production area is both the main strength and weakness of a wine appellation, a guarantee of quality but a major obstacle to growth. Plans in Champagne, arguably the premier appellation of them all, to expand its production area have drawn severe criticism but Richard Woodard believes the criticism to be unfounded and borne at least in part out of envy.

Champagne in 2008 is awash with contradictions. Most French winemaking regions would be happy with a 5.3% rise in shipment volumes - and moderately ecstatic at recording the 7.3% surge in exports Champagne saw in 2007. Moreover, most industries are deeply concerned by the global economic downturn and its likely effect on consumer spending.

But Champagne is not most industries. Such is the current supply squeeze that Ghislain de Montgolfier, co-president of the Comité Interprofessionnel du Vin de Champagne (CIVC), would actually welcome a downturn, as long as it is a minor one. "We want to have a flat market," De Montgolfier says. "Our increase last year was too high… We want a gentle economic crisis, but we don't want a storm."

De Montgolfier's concerns are shared by his fellow co-chairman, Patrick Le Brun, who points out that historically Champagne has been plunged into crisis whenever the price of grapes has reached EUR5 (US$7.79) per kilo in real terms. In 2007, average prices fluctuated between EUR4.50 and EUR5.50.

Hence De Mongolfier's caution: if the Champagne market continues to grow at current rates, grape prices will escalate and the market will overheat. That happened in the early 1990s, and it took the region years to recover. Some younger growers may have only dim memories of that time, but Le Brun is determined to keep reminding them.

De Montgolfier and Le Brun are Champagne's two figureheads, with the former representing the houses or négociants, and the latter the growers. They are the human representation of the fine balance of interests in Champagne: while the houses own the big-money brands, the growers control the vast majority of the vineyards. Relations can be fractious at times, but the one remains dependent on the other - and they both know it.

De Mongolfier and Le Brun are also the prime architects of the changes sweeping through Champagne at the moment, changes which are designed to guarantee that future supplies of the world's pre-eminent sparkling wine can keep pace with global demand.

Judging from the articles and blogs recently penned on the subject, one could be forgiven for believing that these measures - increasing the maximum permitted yield and expanding the appellation area - are motivated by pure, cynical greed, with little or no regard for the consumer or the quality of the finished product.

Closer inspection of precisely how the Champenois plan to expand their production suggests much of this reaction to be ill-informed. Champagne's exclusivity is simultaneously its main strength and its biggest weakness: the strictly delimited AOC zone offers both a guarantee of origin and a major obstacle to growth. Champagne's strategists are clearly at pains not to sacrifice the former to overcome the latter.

To begin with, the current Champagne "map" is at best partly arbitrary. When it was drawn up in 1927, Champagne was not the multi-billion euro industry it is today, and many perfectly suitable villages simply did not apply for inclusion because they could make more money from crops other than grapes.

Secondly, the CIVC has gone out of its way to handle the planned expansion with painstaking care and attention to detail. Now about three years into the process, the 675 villages originally considered for the appellation have been whittled down to 357, with two previously within the AOC being demoted.

A panel of scientists, including a geologist, a climatologist and a vine expert, was responsible for compiling the evidence - a necessity when you consider that many of the 318 villages excluded are likely to contest the decision. Such appeals are hardly surprising given that a hectare of land inside the AOC is likely to be worth about EUR1m, but the same plot outside might fetch just EUR5,000.

While the lawyers earn their fees at appeal, the next stage of the process takes place: the inspection of each village to determine which sites are suitable for production. Just because your village is in the AOC does not mean you can plant vines simply anywhere.

Then come the granting of planting rights - droits de plantation - over a phased period to prevent a sudden leap in production. The total area eventually added to the AOC may be around 1,500 hectares - an increase in overall vineyard area of less than 5%.

Thanks to this time-consuming process, the first vines in "new" areas won't be planted for another six years at least, with the first Champagne entering the market in 2020 at the earliest. Politics and French bureaucracy will play their part, but the CIVC's evidence-based, quality-first approach is mostly responsible for the extended timeframe.

It is a similar situation with the increase in maximum permitted yields, from 14,000kg/hectare to 15,500kg/ha. "Unadulterated greed with no regard for quality," splutter some commentators, but this is not a case where increased yields mean dilution and inferior quality.

In Champagne, the quest is for acidity, not alcohol and tannin. "Most of the time, when we have quantity, we have quality," says De Montgolfier - and a number of vintages, including 2004, support his argument. "We have to make the most of that if we want to protect the market."

There are other measures too - the introduction of a "personal reserve" system for each grower to allow them to control their own stocks, which has injected more wine into the market; and a crackdown on abusively high yields in the vineyard.

So why have the Champenois been so unfairly misrepresented in the way that they have handled their current supply plight? It is perhaps partly envy, not least from other areas of the trade which do not enjoy the image - and the margins - that are commonplace in Champagne.

But it is not just that. However unfair much of the criticism may be, Champagne is at times its own worst enemy. Are accusations of greed from the outside world so very surprising when Perrier-Jouët and Krug are launching new luxury cuvées priced at EUR1,000-plus a bottle?

Sectors: Wine

Companies: Perrier

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