As the demand for champagne around the world increases, prices in the United States are set to move up, and brides from coast to coast scramble to either increase their budget or find a substitute to serve at their wedding.
Increased demand for the bubbly from Brazil, Russia, India and China has put global Champagne supply under pressure right as the holiday season approaches. Champagne brands are on now on allocation with in the run-up to the crucial holiday selling season, with hikes in prices scheduled for 2012.
Emerging markets are showing increases, "with a 111% growth in the Mideast-Africa region since 2001, along with 150% growth in Asia-Pacific and a whopping 430% advance in Russia."
Jim Clerkin, president and CEO of Moët Hennessy USA, told Shanken News Daily that the "Champagne region is limited to 34,000 hectares and production of 320 million bottles,” he added. “It simply can’t go beyond that capacity." On allocation are brands "including the popular Veuve Clicquot Yellow Label, Veuve Clicquot Rosé, Moët & Chandon Imperial Rosé and Nectar Imperial Rosé. Now that Champagne reserves are topped out, I will have more allocation issues next year.”
Clerkin cited sharp rises in the production costs of Champagne, grape costs rising by 97% in U.S. dollar terms from 2001 to 2010; vineyard land more than doubling in price during that period. Due to these factors Moët Hennessy will be increasing prices in its Champagne portfolio during the first half of 2012.
While other markets have allowed prices to rise consistently, the U.S. has not, so 2012 will see a significant rise in prices with the biggest hike on Moët & Chandon Imperial, which will see a double-digit percentage rise. Other brands in that portfolio will see single-digit percentage increases. The precise level of hikes in prices is expected to be announced by Moët Hennessy USA in about four weeks.
Clerkin said "for the first time in 50 years, Champagne sales have rebounded strongly without overall economic recovery.” Luxuries have rebounded before other sectors.
So if you're a bride, consider pre-ordering at 2011 prices or substituting another sparkling wine for Champagne.
Information from:
The Wine Spectator
Shanken News Daily
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