Has The Champagne Price Bubble Burst?

We’ve been living in an era of bargain bubbly. Yet, despite ever-increasing costs, producers have for years kept a lid on the prices you pay. Change is on the horizon, says Tyson Stelzer, though your favourite celebratory tipple will remain a relative bargain in the immediate term

- Tyson Stelzer

The writing is on the chalk cellar wall. Champagne vineyard prices are up more than five-fold in 25 years. Grape prices are up 80% in 15 years. The region boasts the highest cost of production in the wine world. Yet the price of a bottle of Champagne has risen just 13% in the past decade. Can Champagne continue to churn out the most affordable wines of the fine wine world?

Escalating costs

Did you know that Champagne pays its growers the highest grape price in the world, averaging more than €7 per kilogram, and more than €8 in top grands crus, and rising annually, more than 80% up on 15 years ago?

In the dismal 2017 harvest, Champagne’s largest player, LVMH – maker of Mercier, Moët & Chandon, Ruinart, Veuve Clicquot, Dom Pérignon and Krug – shocked everyone by offering its growers a premium of 6%-7% on the price of grapes, and in some crus as much as 15%, inflating prices across the region.

Even the big players are troubled. ‘This is a problem for us, as we need to follow the price rise, but we cannot increase our ex-cellar price,’ reveals Lanson chef de cave Hervé Dantan. ‘We expect the price of grapes to continue to rise for the next four or five years, and some brands are going to die.’

The average Champagne vineyard is now valued at more than €1.5 million per hectare, making Champagne the highest-value appellation viticultural land on earth, some 60 times the value (according to SAFER, 2018) of a typical Côtes de Bordeaux vineyard!

Champagne also ranks as the fastest inflating value of France’s wine appellations. Champagne’s top Côte des Blancs and Montagne de Reims grands crus are now fetching up to €4 million per hectare.