Not Much To Celebrate
“Not much to celebrate these days” says LVMH Finance Director as consumers turn their back on Champagne. LVMH may have denied recent speculation that it is about to sell its prestige Champagne brands to Diageo – but the region’s leading player has seen Champagne sales volumes drop by 35% in the first quarter of 2009. Following a decade of growth and prosperity, as the GFC takes hold consumers in key markets such as UK and US have started economising and trading down to sparkling wines.
Moet Hennessy’s sales decline is in line with official Champagne shipment figures – domestic(FR)shipments fell 23% and exports excluding the EU plummeted 42% in the first two months of this year. The company said the slump was also caused by retailers and restaurants de-stocking, slimming down their inventories of Champagne as a way of cutting their costs.
The question now is how will the major Champagne brands prevail within these new trading conditions?