Bubbles at a Discount for Consumers Trading Down(2)
In the first six months of the year, sales revenue for Champagne at Rémy Cointreau dropped 42 percent, to $53.19 million, largely because of weak sales in the United States.
Last month, LVMH Moët Hennessy Louis Vuitton, the French luxury goods giant, which owns the houses of Moët & Chandon and Veuve Clicquot, reported an 18 percent drop in its sales of wine and spirits over the first nine months of the year, though it does not break out the brands separately.
The tough year has stoked concerns that some of the struggling wineries may be sold in the Champagne region of northeastern France.
Last month, there was speculation that Diageo, a British liquor company, was discussing a deal with LVMH to buy the world’s oldest Champagne houses. While LVMH denies it and Diageo will not comment, Diageo’s chief executive, Paul Walsh, said openly in August that his company — which holds a 34 percent stake in LVMH’s drinks unit — was interested in buying the rest if Bernard Arnault, LVMH’s chief executive, were to consider selling.
“All the workers and winemakers are talking about it,” said Cyril Janisson, a fifth-generation Champagne maker with Janisson Baradon & Fils. “Nobody knows what is going to happen; it’s crazy. The Champagne makers are waiting to see how many bottles they can sell in this crisis.”
He noted that some smaller companies were faring better because they had not been exporting heavily to the United States.
Far from panicking, some high-end Champagne makers are taking a low-key approach.
Within the Boizel Chanoine Champagne Group, one label, Champagne de Venoge, is increasing its distribution to a wider range of countries. Another, Champagne de Philipponnat, is redesigning labels and actually raising its average prices this year by about 3 percent, to 27.50 euros.
“Most of the marketing is inside the bottle,” said Charles Philipponnat, who runs the company from an 18th century winery in Mareuil-sur-Ay.
Winemaking stretches back generations in the family, so Mr. Philipponnat takes a long view. His father was a prisoner of war in Germany in World War II. The naked copper lines that run through the winery are a remnant from French soldiers who rigged telephone lines in the protected cellar during World War I.
“We had a half a century of crisis. First the phylloxera crisis that destroyed the vineyards and then World War I. Then came the Great Depression and right after that World War II,” said Mr. Philipponnat. “That should put this crisis into perspective.”
