Champagne Bulletin April 2020

Champagne Bulletin April 2020

Green shoots?

The first tentative signs of life and business getting back to normal are beginning to be seen in Champagne.

The French government has said that people will soon be able to travel within 100 kilometres of their homes without the need for papers to justify their journey and the EU is saying that business travel will be allowed to resume in the near future, but this does not yet apply to travel for personal reasons which will still be subject to the 100 kilometre rule mentioned above.

Still, this is a small step in the right direction and the tourism industry in general, into which the Champagne region has invested a great deal of time and money in recent years, is starting to look forward to the time when something like normal operations will be able to resume. Whether this will be in time to save something of the summer season remains to be seen.

Tourism

Pommery 640Meanwhile, Champagne Pommery has announced that cellars visits will reopen on Monday 11th May, albeit with a number of restrictions. There will be no personal guides. Instead visitors will have an audio-visual guide they carry around with them and the, now standard, rules about distancing will be applied.

Pommery says that the re-opening is as much to do with giving local people something to do to raise their spirits after many weeks of confinement at home, as being a commercial decision. Whatever the reason, it’s a welcome move that others will no doubt follow in the near future.

Smaller wineries don’t have the resources to provide audio visual visits and they remain closed for wine tourism, but some of those I have been in contact with say that they are re-opening for orders and shipments particularly to export markets.

The rest of the year

Thoughts are now turning to the rest of the year and especially to the harvest and to the crucial end of the year period.

Dealing with the second of these two topics first, one small ray of light is that well over 50% of champagne sales are made in the final few weeks of each year. This holds out the possibility of the year’s trading being rescued, to some degree, by a strong year end. For the time being, this remains no more than a hope, but you can be sure that, as soon as circumstances permit, all efforts will be focused on the vital final quarter of the year.

Harvesting at JM Tissier 640As regards the harvest, the current state of growth in the vineyards suggest that the harvest will be earlier than usual, perhaps even as early as late August. Although this is unusual, it can be managed without any undue difficulty as long as the social distancing rules are in longer in place. On the other hand, if they are, it is not clear how the harvest could be managed because in Champagne picking is still done manually by teams of pickers working in close proximity.

 

That leaves another and much more problematic issue which is the size of the harvest.                            

 

One of the reasons for the continued prosperity of Champagne has been the fact that, over the years,  supply has been kept more or less in line with demand thanks to the voluntary agreement between grape growers and grape buyers upon the size of each year’s harvest. The yield has to satisfy the growers need to make a living and the buyers need to keep grape purchases in line with bottle sales so as to avoid fluctuations in stock and hence in champagne prices.

Last year’s shipments (297 million bottles in total) showed a decrease versus 2018 and confirmed the downwards trend of the past few years. A fall in shipments puts downward pressure on the size of the agreed yield for each year’s harvest, but there is a limit below which disaster looms for the grape growers.

This limit is generally considered to be about 8,000 kg per hectare, but if sales don’t start to get back to normal fairly soon, even this amount could be under threat.

There will no doubt be animated discussions in the weeks and months ahead between the bodies representing the different sides of this equation. Initial remarks by the president of the growers association suggest that shipments as low as 250 million bottles might be managed, but if shipments were to drop to, say, only 200 million bottles, some drastic and unprecedented action would be required. Moreover, he insists that the burden of the problem must not fallen entirely on the shoulders of the growers.

There is not much more to say other than “Watch this space”