France’s coronavirus crisis has sparked a fierce battle in its hallowed champagne industry over this season’s harvest, with producers and growers at loggerheads over how much bubbly should be put into bottles.
The main production houses are demanding a sharp reduction in harvest yields as sales plunge amid the COVID-19 pandemic. Growers say this would decimate their revenues.
Traditionally, both sides negotiate how many grapes are harvested by the hundreds of champagne growers each year, many of whom sell to merchants including big-name brands like Veuve Clicquot or Pommery.
The goal is to limit the risks from poor harvests and drastic price swings that could put many players out of business.
But merchants say they are already loaded with stocks and with revenues hit hard by the crisis they cannot afford to produce more bottles than they can sell.
“The growers want 8,500 kilograms per hectare [about 7,600 pounds per acre] and the houses want just 6,000 to 7,000 kilos,” said Bernard Beaulieu, a grower in Mutigny, a village amid rolling vineyards south of Reims, the capital of France’s Champagne region.
With the price per kilo expected to remain relatively strong this year at roughly 6.50 euros, the stakes are high.
“Not having a deal with harvests just a month away, this hasn’t happened since after World War II,” Beaulieu said.
The Union des Maisons de Champagne (UMC) trade body, however, expects to sell 100 million fewer bottles this year, an unheard-of hit that will slash overall sales to 3.3 billion euros ($3.9 billion) – down 34% from 2019.
And they say over one billion bottles are currently waiting in champagne cellars, representing several years of potential sales.
The UMC’s director general, David Chatillon, told Agence France-Presse he would not comment on the dispute before an August 18 meeting of the Champagne Committee, which groups both growers and merchants.
‘Roll of the dice’
Growers are especially furious because this year’s harvest, to begin on August 20, is set to be “exceptionally good, with vines able to yield up to 16,000 kilos per hectare,” Beaulieu said.
Maxime Toubart, head of the SGV grower’s association, accused merchants of putting livelihoods at risk by trying to take advantage of a crisis to reduce storage costs.
“Growers are demanding a yield level that covers 2020 shipments while ensuring survival for vineyards,” Toubart said.
The situation for growers is all the more alarming, he said, since the SGV has not obtained additional payroll tax exemptions from the government to weather the coronavirus slump.
For Yves Couvreur of the FRVIC federation of independent growers, which groups some 400 vineyards that also produce their own champagne, “9,000 kilos per hectare is the limit, we can’t go any lower than that.”
To cope with a crisis that could last “2 or 3 years,” he is pushing for a suspension of uniform harvest yields so that the different players could adapt as they see fit.
“The break-even point isn’t the same for people who sell their grapes, and those who make a living off of their brands,” he said.
Couvreur also wants more leverage against merchants by allowing growers to let their wines mature in cellars longer, up to 18 or even 24 months instead of 15 currently.
“Any proposal that prevents a flooding of the market is good,” he said.
For now, if no deal is reached on yields, the decision will be left with France’s National Institute of Origin and Quality (INAO), which governs the country’s wine appellations.
“And if that happens, it’s a roll of the dice for both sides,” Beaulieu warned. – Rappler.com
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