Thirst for Champagne Grows

PARIS, March 14, 2008 — -- The popping of corks resonates today in several parts of France's Champagne region.

Faced with surging demand in bubbles, France has allowed 40 rural villages to join the highly coveted list of areas where the different types of grapes used to make world famous champagne are allowed to be produced.

Until today, just 319 villages spread across 83,000 acres in northeast France composed this growing area that was restricted by a law dating to 1927.

Sparkling wines are made in many parts of the world, but only producers in this designated region of France have the right to call their product champagne, under laws that establish it as a "controlled term of origin," known in France as Appelation d'Origine Controllée or AOC label.

The addition of 40 villages will allow for expanded production at a time when champagne is flowing worldwide at historic levels.

"At stake, there is the economical aspect of the extension because champagne is reaching the end of its production potential, which is fixed at 400 million bottles" said Catherine Chamourin, from the Winegrower Union of Champagne.

For the towns, the designation is an issue of local pride and economic possibility.

"This extension is important for the history and for the image of the village," Gerard Poix, mayor of Champfleury, one of the villages selected to be part of the extension, told ABC News. "Up until today, we were surrounded by champagne-growing villages, without being one of them. Things are going to change now. It will also be important financially to landowners who will be allowed to plant vines. … This is something we've been asking for for the past 35 years."

Exports Up, Except in U.S.

The total sale of champagne hit an all-time record last year with 338.7 million bottles sold, a 5.3 percent jump from 2006. Exports reached 150.9 million bottles sold in 190 countries, confirming the emergence of flourishing new markets such as Asia and Russia where the bubbly drink is very popular among the nouveau riche.

The only champagne market to fall back was the United States, where exports slumped 6.2 percent to 21.7 million bottles, hit by the unfavorable exchange rate between the euro and the U.S. dollar.

The extension of the growing area has been in the works since 2003, partly to address the growing demand but also to end the archaic development of the growing area.

"The economical aspect of the extension is not the only reason why it had to be done. We knew that the extension of the area was necessary, but the most important [concern] was that it had to be done properly in order for things not to get out of control, like we've seen in the past," Chamourin told ABC News.

Over the years, several villages in the area launched court proceedings asking to be allowed to grow champagne grapes to get a share of the treasure. They rarely succeeded in their attempts.

But in 1995, France's highest administrative body, the Council of State, allowed the village of Fontaine-sur-Ay to plant 74 acres of grape vines after a 13-year court battle.

As a result, the value of an acre of land went from $2,200 when sugar beets were grown to close to $800,000 today with its vines. Today, the small village celebrates its third harvest.

"This extension of the growing area is very positive for the champagne producers. The production is going to increase, but not for a while, because the first grapes will appear in about 10 years," Paul-François Vranken, president of Vranken Pommery, the Champagne region's runner-up producer in 2007, told ABC News. "When we have the capacity to produce more with an identical or even superior quality, it's evident it has to be done."

Some Purists Lament Profit Culture

But some people still need to be convinced of the necessity of the extension.

"I would like the champagne not to longer be considered as only a source of profit," Jacqueline Salvatori, the 80-year-old owner of a small champagne shop in Epernay, told ABC News. "The Champagne region needs to tend to the perfection of its champagne, to the improvement of champagne and to the satisfaction of consumers. I don't want to sell poor champagne at a high price."

The list of the new villages selected for the extension of the growing area will be made public in the next couple of weeks.

In 2015, after a series of evaluations, authorities will determine on which parcels the vines will be planted. And by 2020, the first bottles of champagne issued from these new vines will appear on the market.