Champagne Producer Wants To Cut Production In 2009

The situation facing Champagne production is another symbol of how different the global economy has become. Two years ago, concerns over a Champagne shortage put plans in motion to expand the growing region. But as Champagne sales began to fall, the situation changed. Now as Decanter reports, Paul-François Vranken, head of Vranken-Pommery Monopole, one of the three biggest Champagne houses has called for yields to cut in half for the 2009 harvest. In the case of Champagne, the Comité Interprofessionnel du Vin de Champagne determines the maximum yield just before harvest starts after talking with growers and the major chateaux.

It’s the old case of supply and demand. With bottles still sitting in their cellars many producers may want to scale back production. This is bad news for the growers who are paid for the grapes they sell. It may also be short-sighted depending on which way the economic winds of change blow. Is it better to have too much product sitting in your cellars waiting for the buyers whose pockets are now empty or is it smarter to cut production and bet that the next year won’t bring a rapid increase in fortunes (and by association, Champagne drinking).

For years, Champagne sales were high as more and more of the world’s drinkers quaffed the bubbly. But by last October Champagne sales were down for the first time in a decade and it’s only gotten worse since then. Domestic sales were down by a third in the first eight weeks of 2009 and exports are down over 40 percent to both other European countries and the U.S. and Japan. Champagne always gets associated with the exuberance of fortunes, with extravagance and free spending and suffers in downturns as a result.

By Deidre Woollard | Source ::