January 1, Champagne Sales Plummet Amid Global Uncertainty and Soaring Costs

As we head into the second half of 2024, it seems people worldwide have lost their taste for celebration, and it’s visibly hurting the champagne industry. Luxury goods company LVMH, the powerhouse behind such esteemed brands as Dom Pérignon, Krug, and Mercier, has reported a significant decrease in champagne sales, shedding light on the global mood.

On a recent earnings call, LVMH’s CFO Jean-Jacques Guiony pointed out that champagne is fundamentally associated with joy, festivity, and prosperity. “Perhaps the current geopolitical and macroeconomic turmoil is making it hard for people to indulge in such luxuries,” Guiony speculated.

LVMH’s data shows a sobering picture: champagne sales for the company saw a 15% decline in the first half of 2024 compared to the previous year. While the company’s still and sparkling wines have managed to slightly offset this loss with a 16% jump in sales, the drop in champagne demand, especially in Europe, remains worrying.

The Champagne Houses lobby chairman, David Chatillon, echoed Guiony’s concerns, arguing that the murky global geopolitical and economic landscape is pressuring household consumption. “Champagne seems to still be grappling with the ramifications of retailer overstocking in 2021 and 2022,” Chatillon remarked, pointing out another possible cause of the slump in sales.

According to the Comite Champagne, which represents more than 350 Champagne houses, shipments have significantly declined by 15.2% compared to the same period last year, with only around 106.7 million bottles dispatched.

The situation doesn’t seem to be just about the global mood or economy. A practical consideration is also creeping in — the price of champagne, which can range from a hundred to a thousand dollars. It’s increasingly becoming a luxury most people can’t afford in these uncertain times.

Adding to the grim outlook, this year’s grape harvest, the critical ingredient in champagne, has experienced setbacks. Unfavorable weather conditions, including frosts and increased precipitation, have led to a surge in mildew fungus attacks on the vineyards.

It’s clear that the champagne industry, like many others, is feeling the strain of our turbulent world. Only time will tell how they will adapt and, hopefully, reclaim their spot as the celebratory drink of choice.

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