28 November, 2002

Goodbye small, hello big

The champagnes of the future look big. The manager of one of the big players, Remy Cointreaus Jean-Marie Laborde, predicts, that the growing prices of grapes will eventually force some of the small winegrowers out of the game in the years to come. Says British newsagency Reuters.

The loosers will be you and me.

The first signs are easy to spot already. It's all about prices, of grapes and vineyards.

Graperprices passed the limit of crises
The grapeprices have now crossed the traditional limit of crises, five euros per kilo. Champagnehouses and winegrowers, who produce champagne of their own usually need to buy grapes, since houses need more grapes and smaller growers typically don't grow all three grape varieties often in need.

In principle, the big and very rich houses can bid up the price, until they get what they want. The smaller players cannot afford to follow the big ones into infinite prices. This may eventually influence their production, lower it or change the content of it.

So far the big houses, that sell 70 percent of the champagnes of the region, have refrained from bidding up as a sort of unwritten agreement with the winegrowers, that own and cultivate 90 percent of the vineyards.

This summer the biggest of the big ones, the LVMH manager of champagnes, Jean-Marie Barrillère, said that he doesn't want to play by these rules any longer. Instead he will bid up the prices, until he gets what he wants.

He mentioned, that far too many champagnes are sold badly. The Remy Cointreau manager agrees. The problem is, that winegrower's champagnes are usually priced at least five-ten euros under a big house.

Million per hectare
Also the prices of vineyards are now far beyond the skies with prices at a million hectares for the most expensive ones. Big houses can afford to buy whenever vineyards are for sale.

We have calculated these prices ourselves. No small growers - like us - can spend so much to get so little. Only in the fifth generation after us the land would begin to make money. This you can only do, if you have a lot of money and a lot of time to wait for black numbers. The richest houses possess both.

One of them just bought our childless neighbours hectares. The house will take over when the person retires in some years. Montagne de Reims will then have one small brand less, and a big house a few more Grand Cru-hectares to play with.

"It's clear there will be consolidation among the brands." says the Remy Cointreau-manager to Reuters.

The purchase of the vineyards of our neighbour is a good example, how right he is. The development is on already, and the traditional dynamics between big and rich houses and small, rural growers with own brands stagger these years.

More loosers
Too bad for small winegrowers, whose kids eventually will have to sell their vines as plots become too small to do anything with them. Few will have the necessary money to buy out their siblings to keep the land of the family together.

All, who love champagne, are loosers too. The direction of this development is also likely to move towards more expensive and also more standard champagnes.

The big brands sell sublime champagne experiences but they also deliver flat fizz, created to please the palates of the entire world. The small brands sell terribly bad champagnes, that obviously crave for the necessary savoir-faire, but they also present simply fantastic products, that contain all you could ever want from the Champagne terroir.

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