Comité tries to predict demand in difficult market

Yield for 2019 harvest set at 10,200kgs/ha

Champagne producers agreed to set the maximum yield level for the 2019 harvest at 10,200kilos per hectare, 600kgs/ha down on the base level of 10,800kgs/ha originally* announced for the 2018 harvest. If this level of yield is achieved in 2019, it will produce around 300m bottles. The CIVC Comité that represents the two sides of the champagne business — the (grape) growers and the merchant houses (négociants) – see this as the appropriate level to provide a suitable supply of champagne to meet future predicted demand. Or as the Comité put it: “This volume ensures a supply consistent with the needs of operators and maintains a balanced stock level for the sector.”

When they make this decision on the yield level in late July, with the harvest start typically six to eight weeks away, as well as considering the approaching harvest’s potential in terms of quality, health and size, plus the level of stocks and reserves currently held by producers, they look at current and future worldwide demand for champagne. It’s this last element that’s the trickiest; predicting demand. With issues at home, French domestic sales still account for nearly half of all champagne consumed (48.7% or 147.1m bottles in 2018) and in the two major export markets, the UK which is the largest by volume and the USA, the most valuable, this decision was particularly difficult this time.

As the Comité commented in its 24 July statement: “In the first half of the year [2019], Champagne sales increased further thanks to exports. It [value] is close to 5 billion euros over 12 rolling months despite decreasing shipments pronounced on a French market affected, including the consequences of an increased legislative framework of promotions in supermarkets. The resumption of shipments to the UK is only related to the precautionary measures taken on the assumption of a hard Brexit. The dynamism of most third countries, subject to uncertainties on world trade, will probably not fully offset the decline in volumes on the French market.”

This statement needs some interpretation. Worldwide demand for champagne is currently flat with shipments down 1.5% to the end of May 2019, while the MAT year-end figure is predicted to be around the 300m bottle mark. In the French domestic market — where 48.7% of champagne was sold in 2018 by volume but only 41.7% by value – it appears that French legislation banning the sale of champagne at under cost is being more rigorously applied. This is accelerating the overall decline in sales in France.

Shipments to the UK, which went up in the first half year only did so because of producers and retailers stockpiling in advance of the previous Brexit deadline of 29 March. Something it was fairly easy and relatively risk-free to do as at that time, just after the important year-end sales peak, as warehouses were fairly empty. The Champenois don’t believe this is sign of the UK market recovering any time soon. The Comité statement doesn’t even mention anything about President Trump’s threat to impose increased import duties on French wine into the USA, which would also be likely to have a negative impact on sales there.

What the important last quarter of 2019 will bring in terms of sales – it’s in these three months a disproportionately large percentage of champagne is purchased — is therefore very hard to predict. If there is an unexpected surge in sales, there is plenty of supply, however. Stocks are relatively high and after the bumper and high quality 2018 harvest, the average reserve held across the appellation sits at 7,750 kg/ha, very close to the maximum level of 8,000kgs/ha, and equivalent to around 230m bottles.
*While the yield for the 2018 was originally set at 10,800kgs/ha, partly because of its high quality, the Institut National de l’Origine et de la Qualité (INAO) later agreed to allow producers to add 4,700 kg/ha to the reserve (providing their reserves did not exceed the maximum of 8,000 kgs/ha) so producers could harvest up to 15,500kgs/ha.

Champagne shipments fall as exports overtake French domestic consumption in 2018

Worldwide Champagne shipments dropped by 1.8% in 2018, falling some 5,523,085 bottles from 307,379,350 to 301,856,265. This is the lowest level since 2009, when the market suffered a significant fall in the wake of the 2008 financial crisis dropping to 293.3m bottles, and close to the level in 2004 of 301.4m bottles, though at Continue reading “Champagne shipments fall as exports overtake French domestic consumption in 2018”

Champagne shipments rise fractionally only

Champagne shipments has risen very slightly compared to the 306.096 bottles reached in 2016, rising by 0.52% or around 1.6m bottles to 307.7m bottles in 2017. At the end of November 2017 shipments were in line to rise to around 311m bottles and even the Union des Maisons de Champagne (UMC) was predicting 310m bottles. But sales in December, usually the busiest month in the year, fell back generally by around 10%, on the same month in 2016.

The news follows a difficult harvest in 2017, when the general quality, particularly of the Continue reading “Champagne shipments rise fractionally only”

UK champagne shipments fall 14% in value in 2016

Champagne shipments to the UK in 2016 were down 8.68% in volume, falling from 34.2m to 31.2m bottles and 14.03% in value, dropping from €512.2m to €440.4m, the detailed figures just released by the Comité Champagne reveal. This was the largest percentage drop in value among all the top ten export markets, only five of which showed any volume growth in 2016, with shipments to the USA rising the most, up 6.33%, although the value of the 21.8m bottles shipped to the USA only rose by 4.9%.

The fairly dramatic fall in the value of UK shipments, Continue reading “UK champagne shipments fall 14% in value in 2016”

Champagne market slows in 2016

Champagne shipments in 2016 were down 2.1% at 306,036,369 bottles, a little over 6.5m bottles below the level reached in 2015, according to the statistics released by the CIVC. This is just above the 304,994,000 bottles shipped in 2013, the poorest recent year, although immediately after the financial market meltdown only 293,331,000 bottles were shipped in 2009.

The French market declined further, Continue reading “Champagne market slows in 2016”

2016 Champagne harvest yield set to produce around 315m bottles

The yield for the 2016 harvest, currently expected to begin around mid-September, has been set at 9,700 kilos per hectare with a further 1,100kgs/ha to be taken from the reserve at the start of February next year. This level of yield will potentially produce around 283m bottles with a further 32m bottles coming from the reserve next February, if appropriate, making a total production of 315m bottles. This compares with worldwide champagne shipments of 312.5m in 2015 and the news that the MAT total for shipments in the 12 months to the end of June 2016 were up just over 2%.

The harvest is expected to start in mid-September
The harvest is expected to start in mid-September

However, after a very difficult growing season in Champagne so far this year with frosts, disease and uneven flowering all reducing the actual potential yield from the 2016 harvest, it seems likely Continue reading “2016 Champagne harvest yield set to produce around 315m bottles”

Champenois set yield for 2015 harvest

With the 2015 harvest in Champagne expected to start generally around 10 September, the CIVC (Comité interprofessionnel du vin de Champagne) set the maximum allowed yield at 10,500 kilos per hectare at its meeting in mid-July, with a further 500kgs/ha to be released from the ‘reserve’. This is the same level of yield as was set for the 2014 harvest and is in line with expectations that champagne shipments worldwide will be around 307m bottles in 2015, close to the level reached in 2014 when 307.12m bottles were shipped.

With the current level of vineyard in active production of just under 33,700 hectares a yield of 10,500kgs/ha would produce about 306.5m bottles and the additional 500kgs/ha could potentially add just under 15m further bottles.