RTL Today – Sacred industry: virus causes bitter disruption in France’s champagne industry

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                        La crise des coronavirus en France a déclenché une bataille féroce dans son industrie du champagne sacrée au cours de la récolte de cette saison, avec des producteurs et des producteurs en désaccord sur la quantité de bulles à mettre en bouteilles.                        

Major production houses are demanding a sharp reduction in crop yields as sales plunge amid the COVID-19 pandemic. Producers say it would decimate their income.

Traditionally, the two sides negotiate the number of grapes harvested by the hundreds of champagne winemakers each year, many of whom sell to merchants, including renowned brands like Veuve Clicquot or Pommery.

The aim is to limit the risks associated with poor harvests and drastic price fluctuations which could lead to the bankruptcy of many players.

But traders say they’re already laden with inventory and with incomes hit hard by the crisis, they can’t afford to produce more bottles than they can sell.

“Producers want 8,500 kilograms per hectare [about 7,600 pounds per acre] and the houses only want 6,000 to 7,000 kilos, ”said Bernard Beaulieu, producer in Mutigny, a village amidst rolling vineyards south of Reims, the capital of the Champagne region in France.

The price per kilo should remain relatively high this year at around 6.50 euros, the stakes are high.

“Not having an agreement with the crops in just a month has not happened since World War II,” Beaulieu said.

The trade body of the Union des Maisons de Champagne (UMC), however, expects to sell 100 million less bottles this year, an incredible success that will reduce the overall turnover to 3.3 billion euros ( $ 3.9 billion), down 34% from 2019.

And they say more than a billion bottles are currently waiting in champagne cellars, which represents several years of potential sales.

UMC chief executive David Chatillon told AFP he would not comment on the dispute until an Aug. 18 meeting of the Champagne Committee, which brings together both producers and traders.

  • ‘Roll the dice’ –

The winemakers are particularly furious because this year’s harvest, which begins on August 20, is expected to be “exceptionally good, with vines capable of producing up to 16,000 kilos per hectare,” Beaulieu said.

Maxime Toubart, head of the SGV producers’ association, accused traders of endangering their livelihoods by trying to take advantage of a crisis to reduce storage costs.

“Producers demand a level of yield that covers 2020 shipments while ensuring the survival of the vineyards,” said Toubart.

The situation for producers is all the more alarming, he said, as SGV has not secured additional payroll tax exemptions from the government to withstand the coronavirus crisis.

For Yves Couvreur of the FRVIC federation of independent winegrowers, which brings together some 400 vineyards which also produce their own champagne, “9,000 kilos per hectare is the limit, we cannot go lower”.

To face a crisis that could last “two or three years”, he pleads for a suspension of uniform crop yields so that the different actors can adapt as they see fit.

“The breakeven point is not the same for people who sell their grapes and for those who live off their brands,” he said.

Couvreur also wants more leverage vis-à-vis merchants by allowing winegrowers to let their wines age in the cellar longer, up to 18 or even 24 months instead of the current 15.

“Any proposal that prevents a market flood is good,” he said.

For now, if no agreement is reached on yields, the decision will rest with the National Institute of Origin and Quality (INAO), which governs the country’s wine appellations.

“And if that happens, it’s a roll of the dice for both camps,” Beaulieu warned.

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