Pierre-Emmanuel Taittinger looks at current issues in Champagne

Pierre-Emmanuel Taittinger doesn’t come to the UK market very often but when he does it usually makes for interesting copy. The last time I saw him for any length of time was at the Vintners’ Hall fascinating vertical tasting of Comtes de Champagne held nearly two years ago in December 2011. He was on good form again last month and gave a very amusing speech to guests at the Café Royal reception.

ChampagneGuru with Pierre-Emmanuel Taittinger at the Café Royal reception
ChampagneGuru with Pierre-Emmanuel Taittinger at the Café Royal reception

Earlier in the day when we talked about the market one of the most interesting things he said was that for the first time in many years Taittinger was able to buy all the grapes it wanted from the 2013 harvest. Perhaps this is the first sign that grape prices might stop rising each year, a regular increase that has effectively forced the major players to raise their prices to retailers annually for more than a decade. Pierre-Emmanuel is not alone in wanting to keep champagne affordable.


Interview: Veuve Clicquot President & CEO Jean Marc Lacave

Jean-Marc Lacave

Harpers: 3 May 2013 (TBC): Veuve Clicquot President & CEO Jean Marc Lacave

Veuve Clicquot’s President and CEO Jean Marc Lacave says: “We need a relevant new message and the link between wine and gastronomy is an obvious one.” He was speaking at a special lunch in Reims to mark the launch of a new collaboration between the brand and renowned French chef Joël Robuchon. “We like the idea of matching the creativity of a great chef like Joël with that of our chef de cave, Dominique Demarville.”

This interview with Jean Marc Lacave appeared in Harpers 3 May issue, click here to read it: Veuve Clicquot CEO Interview Harpers 3 May 2013

Europe not ‘tomorrow’s market’ for Champagne

New president of the Union des Maisons de Champagne (UMC) Jean-Marie Barillère says that export markets like the UK are “not where growth will be found tomorrow and the houses must anticipate this change by investing in distant markets, especially in America and Asia. It is a long-term job, requiring considerable human and financial resources,” he says.

Speaking as he takes over from Ghislain de Montgolfier, with whom he has worked as UMC vice-president since 2007, Barillère says : « In terms of markets, Champagne must undergo a profound transformation. France, England, Germany and Europe in general, which accounted for 80% of champagne shipments in the past, are not tomorrow’s growth markets.”

“In 2013 and the following years the challenges are well known.  We must adapt to changing circumstances revising the Champagne model to create more value.  Champagne has had several decades of growth but mainly in volume terms, while there has been little increase in value. This growth model cannot be pursued any longer because of the appellation rules, production and yield restrictions [the currently defined vineyard area is more than 95% planted]. We cannot double the production of grapes in the next twenty years.”

“Champagne must adopt another growth model, one based on creating value. Easy to say but hard to achieve as such a policy requires lots of different skills. Fortunately in Champagne we have the people with exactly the right skill set in our ‘grandes maisons’.

Barillère has given up his position in charge of Moët Hennessy Champagne Services, the administrative arm of Champagne’s largest player that buys grapes for all the groups’ brands, to « separate the two functions in the interests of transparency », but his views that priority markets are outside Europe reflect those of Moët Hennessy’s managers.

The detailed year-end figures from the Comité Interprofessionnel du vin de Champagne (CIVC) show that in 2012 countries outside Europe accounted for 19.74% (60.95m bottles) of total champagne shipments, the highest level since 2007 when they took 17.5% of shipments (59.44m bottles). The most important market outside Europe remains the USA. Although shipments there fell 8.7% in 2012 to 17.69m bottles, value of just over €371m gives an average bottle price of €20.98, the highest among the top ten. The only top ten export markets in growth are Japan, up 13.8% to 9.06m bottles and Australia which rose by a hardly less impressive 11.2% to 5.4m bottles.

Shipments to Japan have risen over two and a half times over the past ten years while value has risen in the same period from €80.74m to €173.64m less than €15m behind Germany, although 3.5m more bottles were shipped there in 2012. After the USA, Japan and Italy remain the two top ten markets with the highest average bottle price at €19.16 and €19.11 respectively, but volume in Italy fell back 18.4% to 6.25m bottles in 2012.

Growth in the Chinese market where shipments rose 19.4% in 2011 accelerated jumping 51.8% to cross the 2m bottle mark, although the average price at €13.85 is lower than the price in the UK which is €14.5 a bottle. India rose 20% to 348,358 bottles, while Russia grew by 10.3% to 1.48m bottles, but Brazilian shipments dropped slightly by 6.7% to 980,378 bottles.

Administrator tries to sell off Pressoirs de France assets

It now looks certain that the Pressoirs de France Champagne négociant business based in Faverolles-et-Coëmy to the west of Reims will be broken up and the main asset, the vineyards, sold off to the highest bidder. Having failed to sell the business as a going concern, the l’administrateur judiciaire (administrator) Jean-Luc Mercier, appointed by the French courts on 8 January (see Decanter.com 14 January 2013), has launched a tender calling for bids for the company’s two main sellable assets.

He has listed these as the vineyards it owns, some 10.67 hectares of vines which have an estimated value of somewhere between €11 and €15m, plus the 165 hectares of supply contracts the company has, which include 84 hectares where the contract has a further four years to run.

While vineyard land in Champagne certainly regularly fetches in excess of €1m per hectare, there is some debate about the value of the supply contracts however. With growers paid in four tranches for their grapes, the second payment for the 2012 crop is due today 5th March and Jean-Luc Mercier the administrator has warned suppliers that this payment mounting to €2.5m will not be met by the deadline. In the wake of past scandals like the Bricout affair contracts are now more carefully drafted and may well be nullified if payment is not made on time, making them worthless to any potential buyer.

Despite these developments, owner of the Pressoirs de France group Nicolas Dubois still says he is optimistic about rescuing the business, which may further deter buyers interested in the supply contracts. The vineyards should certainly attract interest from the most profitable groups in Champagne like LVMH which has been actively buying up land under vine. While others like Pernod-Ricard can afford it, boss Michel Letter is on record as saying : “We prefer to build strong relationships with growers and find extra supplies that way there is no need to buy.”

Champagne shipments drop by around 3%

Champagne shipments are expected to fall by around 3% to between 312 and 314m bottles in 2012, back to the level of 2005/6, after a poor November saw sales drop between 6 and 7% on the same month in 2011. Last year, when 42m bottles were sold in December it was the lowest figure for that month since 2004, says Michel Letter, managing director of GH Mumm and  Perrier-Jouët at Pernod Ricard. “If we do the same this December, that will  make 312m bottles for the whole year.”

With “a lot of promotion on the French market recently” where prices in hypermarkets have regularly dropped below €10 a bottle, he expects that level at least to be reached. “This compares with 323m bottles last year,” says Letter “and while a lot of people will complain, it only takes us back to the shipment level in 2005/6 and is not too bad [given the widespread economic recession]. The problem is we have no idea of how things will develop next year making forecasting difficult.

“The French economy is not likely to recover next year and while the US and Asia are doing well, with a 1% downturn in France [where 56% of all champagne sales were made last year] you need a 10% increase in Asia to compensate. The difficult markets are in Old Europe where France, down 4.9% to the end of October, the UK, Spain and Italy have all fallen. All the growth for the category is coming in markets outside Europe with Japan, Australia and China all doing well,” says Letter.

“For the second year running Japan, where exports were up 26% in the first half year, has been our leading market for Belle Epoch [Perrier-Jouët’s prestige cuvée]. In Australia, where shipments were up 16.2% in the first half, we have also done very well, partly because of the Pernod Ricard wine connection and through taking over [from Moët] sponsorship of the Melbourne Cup.”

Dom Pérignon 2002 rosé launch

Chef de Cave Richard Geoffroy is pictured at the Dom Pérignon Rosé 2002 launch in London at Leighton House Museum

Richard Geoffroy, chef de cave at Dom Pérignon is not a believer in pink champagne that can’t be distinguished from its white counterpart with your eyes closed. “If it doesn’t taste different, what’s the point in making a rosé?” he said at the launch of 2000 pink DP a couple of years back. At that event, the first ever oenothéque DP Rosé from the stunning 1990 vintage was also released, somewhat overshadowing its decade younger sibling.

This time round in 2013 with the simultaneous release of the 1993 oenothéque DP rosé alongside the new ‘02, one could say roles are reversed. While 2002 is the most widely produced top class vintage since 1995, ’93 wasn’t much of a year for vintage champagne. But again it is the wine with that extra decade in bottle which stands out now and it is tempting to say: ‘What’s the point of drinking Dom Pérignon Rosé without at least two decades ageing?’ Let’s hope Geoffroy can persuade the accountants at LVMH to keep more DP stock back, so we can. We understand he would like to.

Champagne négociant Pressoirs de France goes into receivership

One of the main players trading in sur lattes Champagne that supplies major UK supermarkets including Tesco, Waitrose and Morrisons has gone bust. After weeks of speculation that is was in financial difficulties, the Pressoirs de France group owned and run by Nicolas Dubois has gone into receivership having failed to find a new financial backer. In a statement to the French press on Wednesday, Dubois said the company was « without sufficient capital to fund its cash needs ».

Dubois, who started his brokering business in 1999, quickly become a large operator predominantly selling cheap champagne to hypermarkets and supermarkets inside and outside France. His group sold 6m bottles of champagne in 2012, he told French newspaper l’Union. He made it clear that the majority of this was bought on the sur lattes market from other producers in Champagne when he confirmed that he had purchased €160m worth of champagne in the sur lattes market in just four years. Working on an average sur lattes price of between €6.5-7 over this period that’s in excess of 22m bottles of champagne.  

According to rumours circulating widely in Champagne, Dubois had recently pre-sold clients large volumes of champagne at just €8 a bottle, banking on the sur lattes price dropping in the current difficult economic climate to make these deals profitable. However, the  sur lattes price has actually risen slightly to just over €7 and when you add in the cost of about €1.20 per bottle for disgorgment, it’s hard to see how this bit of business could possibly have been profitable, which may have triggered Pressoirs de France’s financial collapse.

It was Dubois who supplied the Laurence D brand promoted in Leclerc supermarkets last September at just €5.45 in a loyalty card deal. The Pressoirs de France group also supplies Tesco with its Francois Dubois label; Morrisons with its Louis Dubrince champagnes and Waitrose with  Bertrand de Bessac all of which have been heavily promoted at under £15 in the UK in the run-up to Christmas.

The administrator appointed by the French court on 8 January is trying to save jobs at Pressoirs de France’s operation based in based in Faverolles & Coëmy 10kms to the west of Reims. According to reports in the French press the business has total liabilities of €49m including €30m of bank debt but its assets include 40 hectares of supply contracts bought with the Jeeper brand (also sold by Tesco on-line) by Dubois in November 2009, plus other supply contracts and the equivalent of €25m of unsold stock.

Augustin and Leroux in new positions post Bollinger

Two former top Bollinger managers, well known to the UK champagne trade, have started new export orientated jobs. Hervé Augustin, previously Bollinger MD, whose ‘resignation’ as President of Ayala last September surprised many industry observers, has joined Champagne De Castelnau at the Reims-based CRVC co-operative as their export director. And earlier this month, Stephen Leroux, former sales and marketing director at Bollinger, who briefly worked last year on the export side at Louis Roederer, joined the EPI management team under MD Robert Remnant, specifically working on the Charles Heidsieck brand.

Augustin oversaw a complete restoration of Ayala’s fortunes and image moving over from managing Bollinger after the family bought the ailing house in January 2005. The CRVC MD Pascal Prudhomme says Augustin will help them achieve their objective of « reaching sales of 500,000 bottles for the De Castelnau barand by 2016, its 100th anniversary, with 50% sold outside France”. Aged 62, Augustin’s career in Champagne, which spans 37 years, began at Laurent-Perrier working with his uncle Bernard de Nonancourt.

The appointment of Leroux on the Charles Heidsieck brand shows EPI’s determination to build a talented management team capable of restoring this famous marque’s image, positioning it in the same territory as brands like Roederer and Bollinger.

Moët signs Federer as new brand ambassador

Moët & Chandon has announced that tennis icon Roger Federer is to be the house’s new brand ambassador. Federer will take centre stage in Moet’s new advertising campaign when it starts in March. “Roger Federer personifies the glamour of achievement, great generosity and tremendous style values that have been key to our house throughout its long history,” says Stéphane Baschiera, Moet’s CEO. Moët has become an active sponsor in tennis over the past few months and is the official champagne of the ATP World Tour, the French Open, the Shanghai Masters and the US Open.

Paillard accuses Bollinger of copying his ‘unique’ bottle

Bruno Paillard has accused Bollinger of copying the shape of his ‘unique’ bottle in a press release sent to UK journalists and magazines this afternoon (3rd August). At the start of the release entitled: “When Bollinger copies Bruno Paillard” it says: ‘Even when introduced as an innovation, an irresistible urge to make it rhyme with imitation takes us when we discover the new Bollinger bottle…

And between a picture of the two bottles it continues: ‘See for yourself to which extent it appropriates the exclusive bottle designed in 1984 by Bruno Paillard for the wines bearing his name.’

There is then a quite lengthy quote as follows from Paillard detailing his reaction. “I am deeply shocked that a house – who by the way advertises an ‘ethic’ charter and whose direction I regularly meet every month at the Union des Maisons de Champagne board never has the courtesy to discuss this subject – allow themselves to copy an existing model. At this stage we only have superimposed pictures of their bottle on ours and recorded they were rigorously identical. We will of course ask an expertise on their bottle, and if it turns out they are the exact same model, we will have to start a judicial process, our bottle being registered in many countries.

“I designed this bottle almost 30 years ago, not only to distinguish our House, but also to increase the exchange surface between the wine and the lees, increasing this way the complexity of our wines. This antique shape may remind of a small magnum, but it is not its goal.”

Posing the question to himself as to whether imitation is the sincerest form of flattery Paillard ends by saying: “Maybe, but in such case one can also consider it a servile copy. Which does not make me feel flattered but attacked to tell the truth.”

Bollinger’s offices in Aÿ are currently closed for a pre-harvest break but a spokesman issued the following statement: “We do not wish to comment directly on claims made last week regarding the redesigned shape of our bottle. However, as explained at the initial launch in May, we would like to underline the fact that this redesign drew inspiration from the collection of bottles in our cellars which date back to the mid-19th century.”