Champagne body slams "parasite" discounts

21 March, 2014

Retailer discounts are a parasite on the image of Champagne and must be stopped to ensure the category’s long-term health, according to the Comité Interprofessionnel du Vin de Champagne.

Last Christmas Asda and Tesco sold exclusive label Champagne at £10 – less than half-price – and the grocers slashed prices of branded labels, with 71% of volume sold on promotion (Nielsen, 12 weeks to January 4, 2014).

The CIVC’s communications director Thibaut le Mailloux told OLN: “It’s just a marketing ploy. It puts in the head of the consumer that Champagne can be made at that price.

“It’s at the expense of Champagne. It’s a parasite on the image of Champagne.

“Once retailers have bought half a pallet they make a communication coup out of it.

“They are shooting themselves in the foot by downgrading the category and making consumers expect a price where producers and retailers can’t make a margin that’s sustainable.

“The message is not to make everything as cheap as possible but to give balanced offers to consumers.”

Lanson managing director Paul Beavis, whose Black Label was sold half-price, called December 2013 “a torrid time” but added: “I don’t think any brand owner likes to see it, but it’s not illegal to sell below cost in the UK. It’s a cheap form of marketing.”

Pol Roger managing director Nick James said: “I hate it – it’s disgraceful that alcohol is used as a footfall driver. Independent wine merchants can’t do that.

“It’s a problem for the importing agent who has no say on the end price. I feel for some of my friends in other companies who wake up to find their Champagne is 50% off.

“It starts a turf war. It’s bad for the image of Champagne.”

Prosecco and cava sales continue to grow but Champagne sales are falling and Bolinger supplier Mentzendorff called on the CIVC to do more to promote the product as a quality alternative to rival sparkling wines that merits its higher price point.

Managing director Andrew Hawes told OLN: “The Champagne industry needs to do more. Is there enough information about what makes it special?

“English wines have been very articulate and no one should be critical of that. It throws the challenge down to Champagne to do more to explain itself. Brands are doing their part, but it’s about the controlling associations. There is a need to have a more proactive, rather than reactive approach.

“This isn’t just the view of Mentzendorff. The UK market is incredibly important and there is a danger of complacency. You could explain that every single bottle goes through the Champagne method, which is a job for the CIVC. Essentially that means over 300 million bottles a year are handmade, in contrast to potential competitors.”

CIVC president Bruno Paillard refused to be drawn on how the CIVC could communicate better with consumers, but laid into the Prosecco industry for talking about Champagne too much in its communications and warned it to be more discreet.

He said: “We had an ex-cellar turnover of €4.3 billion in 2013. Ex-cellar turnover for Prosecco is €630 million for the same volume. We are seven times higher but the price [in store] isn’t seven times higher.”

UK director Francoise Peretti said: “A lot of what we have been doing has been hijacked by rival other sparkling wines, rightly or wrongly, so how do we put forward the messages in a world that has changed?”

She said the CIVC has commissioned a study called Champagne 2030 to promote the future health of the category, is devising more communications guidelines and will champion vintage Champagne.

She added: “For the UK market vintage Champagne is a segment we need to communicate more efficiently about.

“It’s not understood and we see it with the figures. It’s not growing but I think British consumers are a very good audience.”

Beavis at Lanson said he thinks the Champagne industry can capitalise on the success of Prosecco by trading consumers up, and argued that the success of other sparkling wines has come at the expense of light wine rather than Champagne.

He said: “Sparkling wine is doing quite well. People are drinking Prosecco and cava. The data speaks for itself – volumes and values are up.

“Bubbles per se is becoming more of an everyday part of people’s repertoire. People have a glass of Prosecco instead of a gin and tonic with friends. It does a job at a price point.

“Where have people fallen out from to buy Prosecco? The latest numbers for 2013 show the Champagne brands have held position strongly in the retail category but Prosecco has grown.

“If you take a calculated analysis it [the growth] has come from [stealing customers from] entry-level wine.

“People are slowly but surely beginning to respect the value of what they are buying, so we are positive about future growth.”




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