Champagne loses its fizz as pandemic hits sales

PARIS (Reuters) - Champagne fell flat last year, with sales tumbling as the pandemic forced drinking venues to close and celebratory events were put on ice, although some year-end cheer meant the decline was less steep than initially forecast.

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Producers’ group CIVC said on Tuesday that sales of bubbly dropped 18% in 2020 by volume, which could lead to a 1 billion euro ($1.2 billion) fall in value. It expects the pandemic to continue to weigh on demand in the first half of this year.

“It is a little better than we had thought,” CIVC co-Chairman Maxime Toubart told reporters. “Around the world, even if we are not allowed to party, there were still some events to celebrate, and champagne is a symbol of celebration.”

Sales of the French sparkling wine suffered as countries closed restaurants and bars and banned hospitality events in an attempt to curb the spread of the coronavirus.

France and key export outlets Britain and the United States each saw a 20% drop in champagne volume sales in 2020, while Japan, another major market, registered a steeper 28% decline, CIVC said.

Australia was a bright spot, with volumes exported there rising 14%.

Total sales of champagne fell to 245 million bottles in 2020 from almost 300 million in 2019. In value terms, provisional estimates put 2020 sales at some 4 billion euros, CIVC said.

After initial lockdowns, the group had projected annual sales volumes would fall by about a third and value sales by 1.7 billion euros.

In view of the better volumes than previously expected, the CIVC said producers had agreed to release 400 kilos per hectare of grapes from their reserves, to complement the 8,000 kg/ha harvested last year.

The year-end holiday period saw some pick-up in demand, CIVC said.

British supermarket retailers reported brisk demand for champagne and other festive specialities, while in France supermarket sales of champagne rose sharply, according to market analyst Nielsen.

The start of this year is likely to remain tough with restaurants and bars still closed and events on hold due to the pandemic, but there are prospects of a rebound later in the year if countries start easing restrictions, CIVC said.

($1 = 0.8228 euros)

Reporting by Sybille de La Hamaide; Additional reporting by Gus Trompiz; Editing by David Evans, Susan Fenton and Jan Harvey