Steve Charters (editor)
The Business of Champagne: A Delicate Balance
Routledge, $135 / £85
Reviewed by Michael Edwards
In this detailed study, Steve Charters, the British MW and director of the Reims Research Centre for Wine-Place-Value, together with a dozen colleagues, presents an overview of the way in which Champagne is organized, managed, and marketed. The book came out of a tour of the region in 2008 by the group, who are mainly anglophone academics in Australasia and North America, often at universities steeped in wine culture, such as Auckland, Otago, Adelaide, and Sonoma. The aim was an external perspective on Champagne and how it relates to consumers.
The authors stress that "the crucial issue in the organization of Champagne remains the balance between growers and houses." According to this study, the growers own 90 percent of the land bearing grapes but are responsible for selling less than one quarter of all bottles of wine. The houses make over two thirds of sales but own less than 10 percent of the vineyard land. These figures look slightly skewed, and on checking with the Committee of Champagne (CIVC ) in May 2012, the growers' share of sales is now apparently 30 percent. What's more, in a market traditionally dominated by the grandes maisons, since as many as 1,200 growers' Champagnes are now to be found on export markets, either from independent domaines or récoltants-coopérateurs. Nonetheless, the interests of the négoce and the vignoble are, on the whole, finely balanced. As Olivier Piazza, director of the bijou Beaumont des Crayères cooperative at Mardeuil puts it, "In such equilibrium of interests, both parties have an obligation to work together-we need each other."
However, as an external view, The Business of Champagne inevitably misses out on the internal tensions that now exist between the Syndicat Général des Vignerons (SGV) and the Union des Maisons de Champagne (UMC ). As recession bites and the euro crisis remains unresolved, the Champagne economy is suffering from antagonisms between the players: the all-powerful LVMH group willing to pay top dollar for the best grapes; aggressive co-ops sometimes thinking fancifully that they can do better than Moët in marketing Champagne; and independent, largely family-ethos houses are caught in the middle, their contracts with growers for grape supply increasingly under threat.
As Bruno Paillard, head of the Boizel Chanoine group and president of the Champagne appellation ruefully observes, "LVMH has a real army of persuaders in the vineyards, and there is a lack of serenity in Champagne at the moment." Certainly one gets the feeling that the Champenois do not always appreciate when they are comparatively well off. To give a little perspective, the Reims Centre reveals that the average holding of a grower's vineyard land is 2.2ha (5.4 acres), a small area for sure, but with a surprising potential gross income of ¤130,000 per annum-still financially viable and proof, if any were needed, that there are few poor grape farmers in Champagne!
There is much else to like in these closely argued pages. Setting aside any passing concerns about the tensions between houses and growers, it's good to report that the authors are adept at illustrating the idiosyncratic Champenois system of mutually managed cooperation and competition-and to a level of organization as nowhere else in the world of wine. As Charters concludes, "There can be few, if any other industries that unite both primary and production enterprises in a common body, as well as the competing businesses within each half of that system." Can you imagine such a coalition in Bordeaux?
Perhaps the most compelling chapter of all is the "Future of the Champagne Brand" by Larry Lockshin, professor of wine marketing at the University of South Australia. He identifies the biggest threat to Champagne's dominance and luxury positioning as the potential for reduced prices. Perpetual discounting by multiple retailers in the UK and the USA , where 80 percent of off-license sales go through a checkout, is the lethal destroyer of a brand image. Add to this another incentive to buy, such as the aptly named BOGOFs (buy one get one free).
With time, these can set off a spiral of further price falls, with the recommended retail price no longer listed and new discounts below the previous discounts being promoted. If the strategy of the Champagne producers is rightly to emphasize the exclusivity of their creations-which account for just 14 percent of world sparkling-wine production-sooner or later, big houses in particular will have to put an increasingly powerful brake on discounting, keep yields reasonable, and concentrate on improving quality.
And finally, a plea to Steve Charters and his collaborators in their otherwise fine book. You rather underplay the increased profile of top grower-domaine Champagnes on world markets. The numbers may still be comparatively small, but it's a niche market with a good future. In great restaurants and finewine retailers across the world you will find the cream of the crop direct from the vineyard. Yes, in the shop windows of Fifth Avenue and St James's, a bottle from an artisan craftsman like Selosse or Larmandier is as likely to be displayed as a flagon of Krug or Cristal. The time of the little guys has come.