Champagne sales plunge on pandemic blow

Champagne fell flat last year, with sales tumbling as the COVID-19 pandemic forced drinking venues to close and celebratory events were put on ice, although some year-end cheer meant the decline was less steep than initially forecast.

Producers' group CIVC said on Tuesday that sales of bubbly dropped 18 per cent in 2020 by volume, which could lead to a €1 billion (£890 million) fall in value. It expects the pandemic to continue to weigh on demand in the first half of this year.

"It is a little better than we had thought," CIVC co-Chairman Maxime Toubart told reporters. "Around the world, even if we are not allowed to party, there were still some events to celebrate, and champagne is a symbol of celebration."

France and key export outlets Britain and the United States each saw a 20 per cent drop in champagne volume sales in 2020, while Japan, another major market, registered a steeper 28 per cent decline, CIVC said.

Australia was a bright spot, with volumes exported there rising 14 per cent.

Total sales of champagne fell to 245 million bottles in 2020 from almost 300 million in 2019. In value terms, provisional estimates put 2020 sales at some €4 billion, CIVC said.

It was the first time in 50 years that exports fared better than domestic sales, Jean-Marie Barillere, CIVC co-Chairman, said.

"This health crisis is not like other crises," he said, before explaining that the drop in sales was not the result of falling consumer confidence in France for example.

Rather it was the loss of traditional outlets like bars and restaurants that had hurt the most.

After initial lockdowns, the CIVC had projected annual sales volumes would fall by about a third and value sales by €1.7 billion.

The sector decided in July to substantially limit production to support prices, and was able to maintain the product's value as a result.

"It was a dark year, but we managed the crisis by limiting output ... and the end result is better than we feared in July," Barillere added.

In view of the better volumes than previously expected, the group said producers had agreed to release 400 kilos per hectare of grapes from their reserves, to complement the 8,000 kg/ha harvested last year.

The year-end holiday period saw some pick-up in demand, CIVC said.

British supermarket retailers reported brisk demand for champagne and other festive specialities, while in France supermarket sales of champagne rose sharply, according to market analyst Nielsen.

The start of this year is likely to remain tough with restaurants and bars still closed and events on hold due to the pandemic, but there are prospects of a rebound later in the year if countries start easing restrictions, CIVC said.