* Champagne sales volumes seen down 3 pct in 2012
* Revenue seen flat or slightly up from 2011 level
* Europe sales down; demand grows in U.S., Japan, China
By Pascale Denis
PARIS, Dec 21 Depressed by weak economies and
the lingering shadow of a sovereign debt crisis, Europeans are
struggling to find good reasons to crack open the bubbly.
The European gloom means that after two years of increases,
producers will dispatch about 9 million fewer bottles of
champagne worldwide in 2012, a 3 percent drop to around 314
million, industry estimates gathered by Reuters showed.
But more expensive tastes in export markets such as Japan,
the United States and China mean champagne revenue as a whole
will likely match or even pip the 4.1 billion euros ($5.4
billion) achieved last year.
"Despite the drop in volumes, champagne will still have one
of the three or four best performances in history," said Bruno
Paillard, chief executive of Lanson BCC, the world's
second-biggest champagne group.
The market is dominated by luxury group LVMH,
which owns the Dom Perignon, Moet & Chandon, Veuve Clicquot,
Ruinart and Krug brands. Specialist champagne-makers also
include Laurent Perrier, Vranken and drinks
group Pernod Ricard's Mumm and Perrier-Jouet brands.
Sales of champagne - which by definition can only be
produced in the northern French region of the same name - peaked
at 339 million bottles in 2007 for record industry revenue of
4.5 billion euros.
In France, the top sales market for champagne accounting for
52 percent of volumes, demand was down 5 percent by October with
no sign of the trend improving.
"This year has been tough, with a fraught economic situation
in France and Europe," said Thibaut Le Mailloux, spokesman for
the Comite Interprofessionel des Vins de Champagne (CIVC) trade
association, of the stagnant economy across most of the zone.
The British market, the world's biggest importer of
champagne with 10 percent of total exports, remains very
difficult and competitive after seeing a drop of 3 percent in
2011, industry executives said.
Despite the Diamond Jubilee celebrations for Queen Elizabeth
and the Olympic Games in London, champagne sales volumes were
down 7 percent at the end of October in Britain.
The overall drop in Europe 10 months into the year was 6
percent. The CIVC is due to publish detailed statistics for 2012
"Consumption remains bad in Europe, with a significant
slowdown in demand, particularly in France," said Etienne
Auriau, finance head at Laurent Perrier.
In contrast, champagne exports to countries outside the
European Union were up 5 percent as of October, boosted by
demand in the United States, which in 2011 took 35 million
bottles, and Japan, which took 7.9 million.
Russia has remained dynamic, while Chinese demand is
expected to double this year to about 2 million bottles.
"The (Chinese) market is still in its infancy, but it is
capable of evolving very quickly," Laurent Perrier's Auriau said
of a market which this year became one of the top-ten export
destinations for champagne ahead of Sweden and behind Spain.
Consumers in markets outside Europe are particularly
attracted to rose champagnes, special vintages and bottles
containing grapes from a single harvest, as opposed to normal
"brut" champagnes that contain a mixture of years.
"Upmarket bottles are selling better outside the European
Union," the CIVC spokesman said. "The positive trend in new
markets is favourable in terms of value."
Still, the diverging trend between Europe and countries such
as the U.S., Japan and China, is creating a two-track industry
contrasting independent producers that sell almost all their
champagne in France with big groups with large distribution
networks that can tap into growing markets further afield.
"Champagne is two-speed: the houses with a strong image,
highly exposed to exports, are doing well," said one industry
insider. "The others are having to fight."