A price war between supermarkets using champagne as their weapon of choice has broken out the other side of The Channel, shadowing developments in the UK where prices have fallen steadily since mid-October. Two of the major French supermarket groups, Leclerc and Carrefour have both been running promotions on champagne which have seen the price of Paul Francois Vranken’s Premier Cru fall to just €7.78 a bottle in Carrefour earlier this week. The Leclerc group has retaliated with a €8.45 price on GH Martel which runs from 6 to 16th November.
“With discounts as large as this the consumer might think that something is wrong with the wine and I am afraid of this,” commented Michel Letter head of GH Mumm and Perrier-Jouët. “The price of the Vranken champagne [in Carrefour] is below cost, it’s not his [Vranken’s] fault but the supermarket which has set the price, but the consumer doesn’t know that.”
In France retailers are not allowed to sell products like champagne at under cost but just as UK supermarkets get round the restrictions on advertising ‘half-price deals’ which are not really genuine (they have to list the product in question for 28 days at the so-called full retail price prior to offering it at ‘half-price’) the French grocers get round restrictions by giving customers large discounts on their loyalty cards. The GH Martel discount comes via a 50% reduction on the Leclerc loyalty card, while in the Vranken Premier Cru deal where the price has dropped from €25.95 a bottle, Carrefour is giving its loyalty card holders a massive 70%, or €18.17 a bottle discount.
“The price is nearly cheaper than Prosecco,” added Letter. “When they see this, consumers may think, ‘is it really Champagne’? Something must be wrong with it at this price. It is not the producer but the supermarkets doing it, trying to attract customers. They don’t care about the effect, but in the long term Champagne’s image will be damaged,” he says.
Using champagne to drive footfall in retailers is not just a European phenomenon, Letter notes. Just back from the Melbourne Cup in Australia which GH Mumm sponsors he says he saw “Moët selling for A$24.7 [€17.7] at Dan Murphy’s liquor store, that’s below cost”.
“You can have champagne selling at two different prices with one that is twice as expensive, giving the explanation that the grapes are sourced from grands crus vineyards or the wine is aged longer, but three times higher starts to be too big a difference. There is a danger that consumers won’t understand the reason for the difference.”
“The objective of such promotional offers are, from the retailer’s perspective, to drive an increased traffic to their stores thanks to a special price offer on an iconic product. However, such prices disturb the consumer’s set of references, and are not good for the image of Champagne,” says Thibaut Le Mailloux, communications director at the CIVC, Champagne’s governing body.
Prices of champagne in French supermarkets have been gradually falling over the past few weeks with Georges Cartier offered for €9.35 a bottle at the end of October; and Charles Lafitte (a brand owned by Vranken) priced at €12.50 in a BOGOF deal a week earlier at Carrefour. While Heidsieck & Co Monopole (another brand that’s owned by Vranken and sold in UK supermarkets) was priced at €13,50 a bottle in Carrefour at the start of October.