DRINK / Warning: cheap champagne can damage your profits: Anthony Rose reads a letter from Moet & Chandon to the supermarkets alerting them to the perils of selling champagne at pounds 7.99
Sporting victories are celebrated in the stuff, ships launched with it, wedding bells oiled by it. Bollinger Bolsheviks may be derided for their politics, but they are envied for their conspicuous consumption. The champagne image is all part of the pleasure. It means something special, something you cannot afford every week. As with other expensive labels, the cost is part of the appeal.
So what happens when champagne costs pounds 7.99 instead of pounds 17.99?
Tesco has released just such a pounds 7.99 champagne. So has Gateway. Sainsbury's and Safeway are selling one for under pounds 9; Oddbins and Thresher et al are coming in at under pounds 10. Moet &
Chandon, which makes one in every five bottles sold in the UK, and the other grandes marques, which spend a fortune promoting the image of champagne, are not amused.
Moet has written a stern head boy's letter to the purveyors of these cheap champagnes, pointing out the foolishness of their ways. 'With the reintroduction of champagne at pounds 7.99, we feel it appropriate to write to emphasise a few relevant points relating to the long-term damage to the image and perceived quality of champagne that we believe will result.'
Point number one is profitability. Do the shops not realise that if people buy this cheap stuff, the profit margins will be far lower than if they buy expensive - ie Moet & Chandon - champagne? Moet spells it out. 'For every bottle of Moet non-vintage you sell, you need to sell 8.5 bottles of Brand X to make the same cash profit.' Ergo, why only rip off the customers a little when you can rip them off a lot?
The letter goes on: 'The quality of some of the cheaper labels is definitely questionable. At this price point, they will often represent a first-time purchase of champagne for many consumers. We believe that they may be disappointed with the quality, and discouraged from purchasing champagne again.' Instead of trading up to Moet and the other grandes marques, these poor fools will look to the good-value sparkling wines coming from the New World.
Too right, you may think. But, ironically, there is a point to be made here, albeit a different one. The quality of the cheapies does leave a lot to be desired. None I have tasted matches the value of the similar-priced New World fizz mentioned in this column over the past few weeks. Nor are they as good as the better supermarket own-label champagnes.
Sainsbury's non-vintage, for instance, at pounds 11.29, is streets ahead of its pounds 8.45 cheapie, Beauchatel. You get what you pay for - some rather simple, confected, green-edged fizz - with the added premium of the champagne name. It is this parasitic use of the name that the grandes marques have spent so much time and money cultivating which really gets up their noses.
The cheapies only just scrape in as champagnes. They are unlikely to be aged for much more than the minimum 12 months. Most appear to use a fair proportion of the third, and poorest, pressing of the grapes. To stem the tide of poor-quality champagne, a ban on the third pressing and a longer minimum ageing period has been proposed.
Most of the grandes marques already age their wine for three years, and use a small amount of the third pressing. Resistance is expected from the smaller houses and co-operatives. Abolition of the third pressing would be equivalent to losing one in every 13 (admittedly inferior) bottles; and increasing the minimum ageing period would tie up more capital.
The problem for Moet & Chandon and some other grandes marques, especially those pushing towards pounds 20, is that they are partly to blame for the rising price polarity. Until two years ago, the champenois had never had it so good. Demand was so high that supply could hardly keep pace with it. Remember the warning in the summer of 1989 of champagne rationing? Heady days. Big price increases followed. Growers were accused of extortion, but Moet and others went along with the grape price rises as an incentive to growers to keep growing grapes rather than becoming champagne producers themselves.
Was this also, however, part of a strategy to stifle competition from the smaller champagne houses, which supply the supermarket with own-label and cheap champagnes? There is certainly evidence for it. According to Oliver Moore, who imports Marne et Champagne, suppliers of a number of supermarket own-label champagnes, 'by keeping the prices high, Moet could deal a massive blow to its competitors'.
If so, the move seems to have backfired because, as prices rose, the recession struck and the market plummeted. Despite three successive bumper crops, sales to the UK dropped 34 per cent last year, and the first three months' figures for this year show a 12 per cent fall.
Not all the supermarkets disagree with Moet: ' pounds 7.99 is still a lot, given that the average purchase is under pounds 3 a bottle,' says Philip Clive, wine buyer for Asda, who cut the price of its own-label champagne instead of introducing a cheapie. 'If the quality deteriorates, it becomes increasingly difficult for the consumer to differentiate between champagne and other sparkling wines.'
But others feel that Moet is trying to manipulate the market to protect its own declining sales. According to Angela Mount, who buys wine for Gateway: 'Champagne sales have suffered, not only because of the recession but also because the price of the grandes marques has risen astronomically. This has made it all the more important to keep good value, own-brand champagne on the shelf. We have noticed a definite move towards own-brand, away from the grandes marques.'
In view of the huge stockpiles of champagne, it looks as if pounds 7.99 champagne will continue to be used for a while as a ploy to lure shoppers. And it may get even cheaper, as the premier prix champagnes have done in France, as long as own-label champagnes do not suffer as a result.
The grandes marques are keeping a stiff upper lip, pledging not to cut prices for the sake of 'stability'. So for the foreseeable future it looks as if we will have three tiers of non-vintage champagne: the grandes marques, supermarket own-label and the cheapies. Not quite the good, the bad and the ugly, but the category considered worthy of the name of champagne will be a matter for the eye and palate of the consumer.
WINES OF THE WEEK
Champagne Extra Dry, pounds 11.29 at Sainsbury's: from the house of Duval-Leroy, a fine, refreshing fizz with some of that yeasty, biscuity character which distinguishes good champagne from lesser sparkling wines.
Extra Dry Vintage 1983, pounds 13.75 at Waitrose: one of the best supermarket vintage champagnes; classically good value, toasty, mature; worth snapping up before the next change of vintage (to 1986).
Laurent Perrier Brut, pounds 16,99 at Asda ( pounds 15.16 in seven-for-six offer); Oddbins, pounds 14.60 (17.5 per cent-off-case discount); Bottoms Up, pounds 17.69 (17.5 per cent off case). One of the most consistent and reasonably priced grandes marques, worth the extra for the aromatic power, elegance and Danish-pastry-like richness of flavour.
Life & Style blogs
Miley Cyrus' VMA outfits spark copying controversy
Huawei Mate S and Huawei Watch: new products take on iPhone 6 Plus and Apple Watch
What marriage would look like if we actually followed the Bible
Overly-controlling parents cause their children lifelong psychological damage, says study
What do the emojis on Snapchat mean?
- 1 If these extraordinarily powerful images of a dead Syrian child washed up on a beach don't change Europe's attitude to refugees, what will?
- 2 Senior British politicians tell David Cameron: When dead children are being washed up on beaches – it's time to act
- 3 Make your voice heard: Sign The Independent's petition to welcome refugees
- 4 Refugee crisis: Aylan's life was full of fear - in death, he is part of 'humanity washed ashore'
- 5 German police forced to ask public to stop bringing donations for refugees arriving by train
iJobs Food & Drink
£25000 - £28000 per annum + 24 days holiday, bonus, etc.: Ashdown Group: Print...
£20000 - £26000 per annum: Recruitment Genius: With offices in London, Manches...
£30000 per annum: Recruitment Genius: Customer and Brand Manager required for ...
£25000 - £35000 per annum + benefits: Ashdown Group: Systems Administrator A...