Today's a very important day in the champagne calendar, perhaps the most important day of the year.
No, it's got nothing to do with the launch of any new champagne, nor with any special promotional. It's the day when the size of this year's harvest will be decided and that will have a direct impact on the price of grapes and of the price of your champagne in 2011, the earliest that this year's harvest can be sold as champagne.
If you look back just over a year, worldwide sales of champagne had reached the dizzy and record heights of almost 340 million bottles - supply just couldn't keep up with demand and you may recall that there was talk of adding 40 new villages to the official Champagne production area so as to keep up with the seemingly ever-growing sales.
What a difference a year makes.
Since then shipments have dropped back to some 270 million bottles and you don't hear people talking much about expanding the production capacity.
Instead the hot topic is cutting back on the supply and the simplest and most effective way to do this is to reduce the harvest - that sounds easy enough, you might think, but it's fraught with difficulty because of the structure of the champagne industry.
Most champagne is sold by the big international brands and so they have a lot of clout in any negotiations.
As a rule of thumb, they keep up to 3 year's worth of sales maturing in their cellars.
With the drop in sales that stock level has risen to well over 4 year's and holding that amount of excess stock opens up a big hold in the finances of the brands, so the last thing they want is another big harvest which would just mean even more stock on hand.
The grapes on the vines could yield 14,500 kg per hectare if they were all harvested ( it was 13,000 kg last year), but the Moët & Chandons, Veuve Clicquots, Roederers, Taittingers and other big producers are pushing for a reduction to only 7,500 kg.
This would not only mean they could get the stock holding back to normal, but it would also avoid a big drop in champagne prices due to excess stock flooding the market. That's really the thing the image-conscious brands want to avoid at all costs.
On the other hand....
Consider the plight of the grape growers and of the smaller champagne houses who's sales have held up much better than the big brands.
The grape growers obviously want to harvest and sell (to the big houses) as many grapes as possible - their livelihood depends on it. With a harvest of only 7,500 kg they'd be in serious danger of going bust.
Equally the smaller champagne houses see an opportunity to grow their sales and don't want too dramatic a cut in the harvest either. They recognise the need for a controlled harvest but they' re pushing for much more modest reduction to around 10,400 kg per hectare.
And therein lies the rub. How to square this particular circle ?
Of course the same sort of debate goes on every year, but it's much more heated this year with grape growers (vignerons) ready to demonstrate in Paris tomorrow if today's meeting doesn't go their way.
( An interesting and very Gallic tactic that: organise the strike before the meeting, just in case).
Whatever the outcome of the meeting - and I'll bring you the news as soon as I get it - the chances are that if you visit Champagne this Autumn you'll see bunches of grapes left to rot on the vines, or on the ground because they are just not needed - the only question is, how much will be left to rot?
Watch this space
Jiles Halling
e-mail : jiles@madaboutbubbly.com
Why not take a trip to Champagne yourself to see what's going on. To rent my wonderful house in the heart of the vineyards take a look at
http://www.debateabubble.com/your-place-in-champagne.html
Big lesson for entrepreneurs to learn here...
Supply and demand can work for you as well as against you!
Another great debate from Jiles.
Salut my friend...
John :)
Posted by: John Sturrock | 09/03/2009 at 09:25 PM