A World Without Champagne?

Is this bye-bye to bubbly? Demand in emerging countries is prompting shortages.


LONDON, England, Aug. 13, 2007 — -- Whatever will the swills swill?

A champagne shortage has bubbly lovers in a tizzy as experts warn that it may become increasingly difficult to find a bottle of the beloved French wine.

As demand for champagne has soared across the world -- especially in emerging markets such as India, China and Russia -- producers are struggling to produce more bottles.

Three hundred million bottles of the French fizzy wine were sold last year.

To this day, the French still consume most of the world's champagne (56 percent), according to the Comite Interprofessionnel du Vin de Champagne, the Champagne Producers Union.

But consumers across the world are catching up.

In China, annual sales have increased thirtyfold, from 16,000 bottles to 500,000 last year, according to the Champagne Producers Union. In Japan, sales are four times greater than a decade ago, with 8 million bottles sold last year.

Last year, U.S. consumers purchased 20 million bottles of bubbly. Britain is the biggest consumer of champagne outside of France, with 36 million bottles sold last year.

"Sales of Champagne in the U.K. are skyrocketing," said Michelle Asselineau of London's Nicolas wine merchants, especially popular brands like Veuve Cliquot and Laurent Perrier.

But "supplies are tightening," warned Asselineau, "the demand is too strong. Some producers have asked us not to advertise too much for their products because they will not be able to put out enough bottles."

Among the explanations for the supply shortage is strict French regulation, which allows producers to grow champagne grapes only in a specific region. "We cannot get grapes here and there to meet the demand," said Daniel Lorson with the Champagne Producers Union.

"We can produce a little bit more, but the global demand grows faster than our production capabilities in the champagne region."

Another explanation for the scarcity is that some small producers are storing away stocks of their bottles, hoping to sell them at a better price once they retire.

For them, keeping a stock of bottles is "even better than saving money at the bank," said Lorson, "because they don't pay taxes on their bottles." It would be extremely difficult to estimate how many bottles small producers have in stock, said Lorson, but it is probably in the tens of millions.

Pierre Cheval, producer of Champagne Gatinois, estimated that as many as 100 million bottles are being kept in stock. He admits that he keeps a stock of champagne "for safety, in case of bad harvest."

And there's more bad news: the less bottles on the market, the higher the price of this already pricey favorite. "Champagne prices have already started to rise," said Asselineau.

But the demand keeps growing, especially in the emerging markets. In India, Brazil, China and Russia, champagne is considered a luxury good, said Lorson, and consumers in those countries are willing to pay more for a bottle, up to the equivalent of $40 dollars for an initial price.

There are also fears among French producers that consumers who can't find champagne may buy bubbly from other countries instead. "In the U.K., more and more people are buying the Italian fizzy Prosecco and bubbly from New Zealand," said Asselineau.

Two billion bottles of bubbly were sold last year, and only 15 percent of them were French champagne, according to Lorson. "There are bubbly producers outside of France who just can't wait to get market shares," said Asselineau.

"The threat is real," said Pierre Cheval producer of Champagne Gatinois. "We can't prevent people from getting their bubbly somewhere else. But our job is to make sure that champagne stays on top of the heap."