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Ah, The Rich Life – Champagne Sales Up 15 Percent

  • Spence Cooper
  • December 19, 2011

In spite of the lackluster economy in both Europe and the U.S., the Wall Street Journal’s Marion Issard claims champagne labels recorded a 15% sales growth over the first nine months of 2011.

In fact, Issard notes that for Louis Vuitton, Guerlain, Hermès and PPR’s Gucci, sales of luxury-goods as a whole have increased.

Last August, The New York Times pointed out that in a poor economy where Americans are pulling back on spending, the rich are buying everything in sight: designer clothing, luxury cars “and about anything that catches their fancy.”

According to the research service MasterCard Advisors SpendingPulse, as of last summer, the luxury category posted 10 consecutive months of sales increases compared with the year earlier, even as overall consumer spending on categories like furniture and electronics has been “tepid”.

Analysts claim the stock market is responsible for driving up luxury item sales. “Our business is fairly closely tied to how the market performs,”said Karen W. Katz, the president and chief executive of Neiman Marcus Group. “Though there are bumps based on different economic data, it’s generally been trending in a positive direction”

The increase in champagne sales marks a significant rebound from two years ago, when producers slashed production because of worsening global economic activity.

“Champagne sales are faring well ahead of the holiday season and are up 15% compared to 2010,” said Emeric Sauty de Chalon, president of French online wine shop 1855, which last month organized a major champagne tasting in Paris.

Though sales may not reach the levels seen before the crisis, we’re getting closer, said Stephanie Mingam, the spokeswoman for drinks group Pernod Ricard’s champagne division, which owns Mumm and Perrier-Jouët champagne.

Issard claims other champagne makers have also noted that consumers are willing to pay more for champagne.

Ah, The Rich Life – Champagne Sales Up 15 Percent“Lanson-BCC, the home of the Lanson, Besserat and Tsarine brands, said the price/mix effect”a key indicator reflecting both the type of champagne customers buy and the evolution in prices”rose 5.6% in the first nine months of the year. Competitor Laurent-Perrier said its price-mix effect increased 7.6% between April and September, and its net profit tripled.”

In 2008 and 2009, champagne makers drastically cut production to avoid a large drop in prices, “leaving tons of grapes rotting in the fields during the harvest.”

According to CIVC, the champagne trade organization, shipments from the Champagne region of France fell below 300 million bottles in 2009 for the first time in five years. Last year, the industry shipped 320 million bottles, valued at $5.49 billion, the CIVC said.

Champagne makers still fear the deepening euro crisis could stall champagne sales, so some producers are marketing champagne consumption as a distraction rather than a celebration.

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