Commodities

Champagne to pop sales record as demand flows again

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PARIS, Dec 20 (Reuters) - France's champagne producers are preparing to toast record annual sales, an unexpectedly brisk turnaround from last year's pandemic-related troubles that is making them confident they can withstand the onset of the Omicron variant.

Sales in 2021 are expected to top 5.5 billion euros ($6.2 billion), above a previous peak of 5 billion euros two years ago before the coronavirus pandemic, Jean-Marie Barillere, president of champagne industry group UMC, said.

"It's been huge and so unexpected that we've seen some breakdowns in the supply chain, like in all sorts of other products at the moment," he said.

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The rush to enjoy the famed sparkling wine again could leave some champagne lovers short during the year-end festive period.

Champagne was already showing the biggest out-of-stock level among major grocery categories in French supermarkets in early November, according to retail data specialist Nielsen.

In his specialist champagne cellar in central Paris, Benoit Melendez is also seeing deliveries from some suppliers dry up.

"My fear is not to be able to satisfy customers who are looking for specific things (...) and not by December 31."

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A late wine of Chardonnay is seen in the cellar where bottles of Champagne are left to mature during the traditional Champagne wine harvest in Bethon, France, August 20, 2020. REUTERS/Charles Platiau

The pinch on supplies does not represent an underlying shortage, with champagne producers holding large reserves that can be tapped to blend gradually for new bottles.

The pressure on availability has contributed to the spectacular 2021 sales, with prices being revised upwards by some producers during the year, according to Melendez.

The revival in champagne demand is part of a broader economic upturn as consumers emerged from lockdowns imposed during previous waves of the pandemic. read more

Economists and investors are, however, wary that the Omicron variant will cause activity to stall again, particularly in Europe where some governments have introduced new lockdown measures. read more

However, Barillere sees a readiness to celebrate at home, nurtured during the pandemic, sustaining champagne demand even if venues are shuttered again, a view shared by Melendez.

"Since the vaccines and the end of summer, people have been saying we'll have to live with this and that means simply living," Melendez said.

($1 = 0.8862 euros)

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Reporting by Lea Guedj Writing by Gus Trompiz Editing by Mark Potter

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