Business

Will the Champagne shortage burst Australia’s Christmas bubble?

Australians are popping a record number of Champagne corks during COVID-19, with the IRI National Liquor Read Market Edge report showing the category is up 40%. Billecart-Salmon saw its sales increase by more than 60% in Australia in 2020, while sales surged by 27% for Pernod Ricard’s Champagne brands Maison Perrier-Jouët and Maison Mumm.

And the trend show no signs of slowing down.

According to Emperor Champagne, some Champagne brands are even moving to allocation-only in Australia to avoid a long-term shortage.

“Overall for us, we’ve been really fortunate as a business as in markets like Australia and New Zealand we’ve seen consumers continue to spend and we have seen a trend of them trading up into our more premium brands,” global marketing director and CMO Eric Thomson told The Australian.

“This has seen us doubling down focus on some of our high-end wines and super premium spirit brands as consumers continue to spend more dollars on treating themselves.”

Thomson added that those who were lucky enough to have some disposable income were shifting the money they would have spent on holidays and going out for dinner into at-home indulgences.

“Consumers are looking for ways to mark everyday occasions more so than before,” he said.

“It’s about opening a slightly nicer bottle of wine, looking for new reasons or small milestones to celebrate and people appreciating spending time with their families.”

Champagne supplies dry up

However, there are fears that our passion for popping will lead to growing shortages of pricey bubbles as Christmas approaches.

The Daily Telegraph said: “Low stock supply, increased freight costs and record demand has led to what one ­industry veteran describes as a ‘once in a lifetime’ global shortage, with Australia – given its low market share and geographical position – set to cop a large chunk of the fallout,” the DT reported.

Pernod Ricard account manager Ken Mehr added that the recent relaxing of social restrictions in the US and Europe is putting even more pressure on supplies.

“I have never seen anything like this,” he said. “People have been limited by the pandemic in so many ways. They can’t travel. So if nothing else they want to drink champagne and they want the best stuff.”

Some brands including Ruinart are out of stock, with doubts they will return to the market before next year.

It’s a similar story in the UK, where Drinks Business said strong demand for Champagne is likely to cause some shortages towards the end of the year, with consumers unlikely to see discounts in the shops at Christmas. 

Meanwhile, warnings about Champagne shortages have been issued in the US for Thanksgiving, Christmas and New Year’s Eve.

Earlier this month in the Hamptons, a billionaire had to fly 15 cases of premium champagne on his private plane from France for his wife’s birthday party.

Restauranteur Zack Erdem told the New York Post: “I have one Russian billionaire who comes to the Hamptons for one week every summer, after stops in Ibiza, St Tropez and Mykanos,” Erdem said. “He always drinks Cristal at breakfast. I had to tell him to bring his own or I’ll be serving him a $10 bottle of Prosecco instead.”

Quelle horreur!

Mumm still No.1 with Champagne lovers

Thomson also confirmed the Pernod Richard brand Mumm will continue its longstanding sponsorship of the Melbourne Cup.

While most of the top 10 export markets for French bubbles experienced double digit sales declines in 2020, Australian sales were up 11.2%.

“This difficult year proved very positive for Champagne in certain countries,” noted Comité Champagne in its 2020 report. 

“This was particularly true of Australia. Thanks to its excellent handling of the pandemic, the seventh largest Champagne market by both volume and value recorded growth of 11.2% in volume to 8.5 million bottles, equalling the record set in 2017. Turnover increased by 11.1% to €126.1 million. This was the biggest growth in 2020 among Champagne’s leading markets.”

In fact, 2020 marked the second best year in the history of Champagne exports to Australia, after 2017. Since 2006,
exports have increased in both volume and value by an average of 7.9% per year, propelling Australia from the tenth to the
seventh biggest Champagne market by value.

In April, Thomson told Drinks Digest that Australia had retained its position as the number one export market outside Europe for Pernod Ricard with G.H. Mumm.

“Over the last 12 months, Australians have enjoyed G.H. Mumm more than ever, with the brand continuing to grow ahead of the category and maintaining its position as Australia’s favourite Champagne.”

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