A glut of production combined with a sudden drop in
champagne drinking means that the wine trade is faced with a massive oversupply of champagne for sale, which could be good news for drinkers.
Genuine champagne for less than £10 a bottle has already been spotted and there may be more discounts to come.
TRANSCRIPT
REPORTER: It’s been heavy weather for most businesses this year, but not the wine producers of Champagne. A perfect season for growing grapes has made for a bumper harvest, and the cellars of this most prestigious of regions are full of new wine. But the bursting of the economic bubble has put a stopper in demand for champagne. Britain drinks more of the stuff than any other country outside France—one in four bottles exported ends up here. But shipments so far this year are more than 30% down.
ROBERT JOSEPH, WINE EXPERT: Firstly, we’ve got less money to spend, but very importantly we’re not actually doing the conspicuous spending that we were a few years ago. And I think that’s one of the big questions that’s hanging over champagne—even when we’ve got more money, are we going to go and flash that money around when we buy bottles of champagne?
REPORTER: Discount supermarkets Aldi and Lidl are already selling genuine champagne for less than £10 a bottle. So is the off-licence chain Threshers. But the company which owns it First Quench went into administration last month and the subsequent mass sell-off of stock will also help to push champagne prices down. However, the big champagne houses are nervous that if they discount now, they could damage their reputations and make it harder to charge premium prices in the future. They will also be discounted this Christmas, but by the retailers, not the producers. And the very cheap champagnes will be from own brands and little-known labels.
REPORTER: Do you think for the £10 champagne, that’s going to be something worth drinking?
SIMON BAILE, MANAGING DIRECTOR, ODDBINS: Honestly, no. I would strongly recommend that if you’ve only got £10 in your back pocket, and that’s all you have, it’s not a problem, go and buy some really good sparkling wine because there’s some fantastic sparkling wine made in all sorts of parts of the world—you can go to Spain, you can go to Italy, you can go to France, um, and New Zealand, Australia. There’s so much stuff out there.
REPORTER: The prestige of the champagne name has weathered many recessions before, but the supply glut after a season of perfect weather could be the biggest threat to its place as the king of sparkling wines.
COMMENTS
1. Did you spot the puns? Heavy weather, bursting of the economic bubble, put a stopper in demand, weathered many recessions.
2. Note the difference between champagne the drink (small 'c') and Champagne the region (capital 'c').
LESSON IDEA
This video covers many important business themes such as supply and demand, pricing, and luxury goods. Why not get your students to do some research on champagne/sparkling wine prices at local retailers and report back?