The third ‘new’ force was neither new nor unexpected. It was none other than Burtin’s neighbour on the Avenue de Champagne, Robert-Jean de Vogüé. He set a pattern of relentless expansionism until he retired in 1973 – or rather when he died three years later – setting the pace for the whole region at a rate which has been followed by his successors. His obsession with growth took two forms: increasing production of Moët and the takeover of some of the region’s many family businesses. After the war he set about developing the firm’s world sales network. ‘I bet everything on indirect publicity,’ he told the French writer, Pierre-Marie Doutrelant – who observed: ‘Did Juan-Manuel Fangio win a motor racing Grand Prix? The victory was duly celebrated in Moët. Was an American showbiz personality arriving in Paris? She would find a magnum of Dom Perignon in her hotel room.’ To help sales de Vogüé bought up his foreign agents, like Simon Frères in London – a step followed by other firms, including such traditionalists as Bollinger. His restless dynamism, combined with the use of Dom Perignon as a symbol for all the group’s wines, opened every door. In 1949 Moët sold a million bottles abroad, about a tenth of Champagne’s total exports. It took until 1963 to surpass the figure of 3 million bottles reached in the first decade of the century, but by the mid-1960s Moët was responsible for a fifth of champagne’s exports.
De Vogüé was insatiably interested in new ventures, even outside Champagne, in order to build a balanced group specializing in luxury products. Not surprisingly he had been the first Champenois to seek a quotation on the French stock market. The biggest risk he ever took was at the end of the 1960s when he bought the Dior perfume business from the textile tycoon Marcel Boussac who ‘crucified him because Robert-Jean was so keen’, in the words of one insider. Then came his business masterstroke, the merger with Hennessy, a major family-controlled company in Cognac.
By the early 1970s Moët-Hennessy had spread its wings as far as California, where he created Domaine Chandon, a beautiful winery making sparkling wine. This was much more ambitious than an earlier venture in Argentina, a winery set up in the late 1940s to make Champana, designed to circumvent import restrictions. Domaine Chandon was a brilliant success, for he had spotted a gap in the market below ‘imported French champagne’ but above native sparkling wines, although he died when Domaine Chandon was still losing substantial sums of money. Today Moët also has vineyards in India and China. As usual, the others followed where he led. First came Piper-Heidsieck with Piper Sonoma. The invasion gathered pace after the election of a socialist government in 1981 which triggered an (unwarranted) panic wave among the French property-owning classes. Roederer, Deutz and Taittinger followed him – while Roederer also invested, less successfully, in Tasmania.
But his ambitions also involved him in takeovers of smaller firms. Thanks to the French inheritance laws these were generally owned by a family with many members, each with small shareholdings, which made it difficult to raise additional capital, as sales – and thus stocks – rose sharply and as the price of grapes rose steadily. This was a major blow to firms which – unlike, say Roederer or Bollinger – did not own vineyards to supply the majority of their requirements. As a later major figure, Joseph Henriot put it, in Champagne ‘it’s financial management which matters’, emphasizing that every additional bottle sold entails enough additional finance to allow three or four more bottles to mature.
As a result, de Vogüé was able to buy the old and distinguished firm of Ruinart in 1963, and more importantly, Mercier in 1970, which gave Moët access to the rapidly growing demand from supermarkets looking for cheaper wines – called by the French premier prix, the first, and thus the cheapest priced bottles. Moët literally combined the two by excavating a kilometre-long tunnel between the firms’ cellars on the Avenue de Champagne. But he lost his last battle, to take over Pommery. Guy de Polignac, was a perfect gentleman, proud of his heritage and of his position as head of the French branch of the Knights of Malta, but emphatically not an effective chief executive, and he was hampered by a numerous family. Although he felt that he represented a tradition of quality, Pommery, despite its magnificent vineyards, made relatively ordinary wines and never attempted to create a luxury product.
At the time de Vogüé’s bid was perceived as a battle for the soul of Champagne, with de Vogüé representing the impersonal forces of modern capitalism and the Polignacs an older, more honourable, tradition of family businesses. It was a close-run thing. One Polignac relative had committed a 30 per cent block of shares to Moët and de Vogüé hoped to gain control through another block of shares belonging to Guy’s brother Edouard. But he remained loyal to the family. De Vogüé lost his last chance for personal reasons. He hated Guy de Polignac so intensely that he wouldn’t offer him any sort of olive branch.
The once-mighty firm of Lanson was similarly paralysed. Six of Victor’s ten children were in the business42 and the cake was simply too small for them all. The eldest, Etienne, cared only for his shooting, and the only realist, Pierre – who wanted to sell out to the growers – was outvoted. In the end the problem of both families was solved in a rather brutal fashion by an outsider, Xavier Gardinier, whose sister had married a Lanson. He had made a fortune in the fertilizer business and in 1979 bought control of both Pommery and Lanson.
Gardinier got rid of all the Polignacs except Alain, a talented and dedicated winemaker, and promptly breathed new life into Pommery. He built a new vat-house within the historic premises, and allowed Alain to launch a luxury champagne, Louise Pommery, with the right sort of Pommery-type softness and elegance. He also injected an appropriate touch of theatricality, ferrying guests around in a helicopter, and leasing the Chateau les Crayères to the finest chefs in the region, the Boyers, who transformed it into a luxurious hotel and restaurant.43 But he found the problem of relaunching the two brands too much of a burden for the pocket of one man, however independently wealthy, and in 1984 he sold out to BSN the French industrial conglomerate. Luckily for both houses, BSN put a young enthusiast, Patrice Bruneau, in charge of both firms. Yet champagne is not a large-scale business – Pommery and Lanson, two of Champagne’s ten biggest brands, together account for less than a thirtieth of BSN’s total business.
Another typical takeover was that of Krug, sold by Paul Krug in 1973 to André Heriard-Dubreuil the ambitious head of the Cognac firm of Rémy Martin. In the early 1970s Krug had suffered a double blow: the post-1973 slump in the crucial British market, and a fall in profitability because the Krugs had never bought vineyards and the price of grapes had risen sharply. It did not help that a hundred members of the family owned shares. Fortunately, Rémy, which fully understood the need to hold large stocks for up to a decade, allowed Paul’s sons, Rémi the salesman and Henri the winemaker, to continue to produce typically Krug style wines – though in 1978 they introduced the much lighter Grande Cuvée to replace the Cuvée Privée – thus incurring the righteous wrath of some truly traditional ‘Krugistes’. By contrast it was useless for Trouillard and de Venoge to buy the front few rows of vines beside the road up from Epernay to Champillon to give the impression that they had extensive holdings on these fine slopes. In the absence of any sizeable acreage they became as vulnerable as any other firms.
The only non-French businessman interested in champagne at the time and by far the biggest outside buyer was not French but Canadian, the late Sam Bronfman, the legendary boss of Seagram, the giant Canadian drinks group. In 1955 he bought a stake in Mumm. Four years later Mumm bought control of Perrier-Jouët from the Budin family. At first both firms went their own ways. When Michel Budin invited René Lalou of Mumm to help blend the first vintage after the takeover, Lalou simply told him to carry on the good work.
Perrier-Jouët’s reputation was helped by the introduction of a premium wine in original packaging. Pierre Ernst, Budin’s associate, noticed lurking on a chimney-piece four magnums of a beautiful bottle designed by Gallé in 1902, enamelled in blue and white flowers. They were moved for safety,
and both he and Budin immediately thought of the bottle as an ideal receptacle for a luxury blend to be called, naturally, Belle Epoque. They found that modern glassmakers could reproduce the original quality at no great expense. ‘It’s cheaper than you think,’ Budin told me at the time, ‘it can be done industrially.’ Belle Epoque was introduced in 1970 at a Paris nightclub celebration of Duke Ellington’s seventieth birthday and became an immediate success – notably in the United States where it was distributed by Seagram’s fine wine subsidiary, Chateaux and Estates.
Seagram gradually extended its grip on the two houses. In 1972 – the year before Lalou’s death – it became a majority shareholder in Mumm and bought up Heidsieck Monopole. Thirteen years later Seagram brought its stake in the three firms up to 90 per cent transforming it into the second biggest group in Champagne, with a new chairman, Jacques Descamps, who had previously built up the Taittingers’ hotel business. Sensibly he used the Heidsieck Monopole brand as a relatively cheap champagne for banquets and in ordinary restaurants, in harness with the more expensive Mumm Cordon Rouge.
Among the smaller firms both Bollinger and Roederer were able to rely on their vineyards, which, in Roederer’s case provided it with four-fifths of its needs. For nearly forty years after the war it was run by the redoubtable Madame Olry-Roederer, who was one of the many widows who provided the backbone for their husbands’ firms over the years (see chapter 5). Unfortunately, Madame Olry-Roederer was convinced that she was badly-off and as a result would not spend anything on the family vineyards. When her nephew, Jean-Claude Rouzaud, was allowed to manage the vineyards in the late 1960s he replanted and reduced yields to improve quality. When he succeeded his aunt in 1973 he changed the management team and set about renewing the firm’s reputation for quality which transformed it into the most profitable firm in the region – at one time in the 1980s it was making 47 per cent profit on its sales. This is partly due to its relative self-sufficiency in grapes, and also to its production of Cristal, long changed (for the better) from the sticky liquid favoured by the Tsars.
All the firms benefited from the fast increase in sales which began immediately after Chayoux’s much-derided prediction. Over the three years 1955–57 sales totalled 130 million bottles, and production was 129 million. For over a decade the increase was due almost completely to sales in France, where sales doubled between 1950 and 1962, and had reached 80 million bottles by the end of the ‘trente glorieuses’ – by the late 1970s every French man, woman and child was drinking more than two bottles a year. Total sales reached over 100 million bottles by 1970 and 185 million ten years later as a result of steady increases, even in years of economic problems. This was partly the result of France’s growing prosperity, but also represented a major change in drinking habits. After the war a shortage of sugar led to the production of drier champagnes which displaced the pre-war, sweet aperitifs like Dubonnet. As a result, sales of Brut rose from half to 90 per cent of the total.
For the first time champagne ceased to be a wine consumed only as an occasional treat and became part of the normal pattern of French wine-drinking, largely as an aperitif before the traditional Sunday family lunch. As a result, and for the first time in the history of Champagne, the French market became of overwhelming importance, accounting for three quarters of sales by the mid-1970s – a complete reversal of the pre-1914 position. From just under 25 million bottles in 1955, total sales rose five times to over 130 million bottles by 1978.
THE VINEYARDS – BIGGER AND BETTER
Such increases demanded an equally dramatic response from the vineyards. The increased production came from both increased yields and increased acreage. The CIVC started awarding the precious droits de plantation (the right to plant more vines) as early as 1952, when the surface planted was lower than before the war. For nearly forty years afterwards there was only one break in the expansion, between 1976 and 1979 when the growers’ leader, Henri Geoffroy, for eighteen years president of the growers’ union, and of the Union de Champagne Cooperative which dominates the skyline of Avize, felt that enough land had been planted. By 1980 production had risen to 200 million bottles but short harvests in the early 1980s led to a shortage of champagne in what proved also to be boom years, a situation which led to a special allocation of 5,000 hectares being planted over a period of ten years, at least half in the Aube. At the same time the growers had the confidence to invest in new equipment, especially after 1954 when a journée de motoviticulture, a day of motorized viticulture, introduced them to tractors and other motorized equipment.
The real breakthrough in productivity came in 1958–9 when the growers started using a synthetic spray instead of bouilli bordelaise (copper sulphate) to combat mildew. In a relatively cold climate like Champagne, the bouilli bordelaise induced the leaves to turn red and fall early, putting a brutal and premature end to the growing cycle and thus weakening the vines. Once restored to full vigour the vines produced more grapes, though not immediately. In the 1950s, when many of the vines were still enfeebled through wartime neglect, each acre of vines had produced a mere 1,540 bottles, less than the pre-war figure. By the 1970s each acre was producing enough to fill 3,200 bottles.
Fortunately for the growers a law was passed in 1964 preventing, in theory at least, the build-up of large agricultural holdings throughout France. As a result, the champagne houses found their holdings frozen at their existing level, and unable to buy more land. Before the war they owned about 2,000 hectares, and had bought a thousand more between 1945 and 1964. But this was concentrated in the grands crus, where they owned over a fifth of the land, as against under an eleventh in the vineyard as a whole. They therefore have relatively minor holdings in outlying, historically despised regions like the western valley of the Marne, the Aube and the Aisne. So the cooperatives and their members are relatively more important in those areas than on the Montagne de Reims or around Aÿ, the historic heartland of the merchants’ vineyards though to some extent they have bypassed the ban through elaborate long-term contracts with growers,
The law ensured that the benefit went exclusively to the growers, and not only to the smaller ones. There was considerable colonization. Bigger growers from the valley of the Marne spread west, buying land round Chateau Thierry while those from the Côte des Blancs looked south to the chalky slopes of the Sezannais. With direct sales, yields and acreage all increasing, the growers enjoyed an increasingly strong bargaining position during the 1960s and 1970s which they exploited to the full. The arguments between the growers and the merchants were kept relatively civilized, thanks partly to the merchants’ acquiescence in the ever-increasing power of the growers, but also to the tact and diplomacy of Jean Pierard, director of the CIVC throughout the 1970s. The contract had to be regularly updated, providing the growers with a steadily increasing income – partly because by 1976 the growers were entitled to 36 per cent of the wholesale price of the final bottle.
Champagne has been a model agricultural region. The number of individual holdings increased from 13,000 to 15,000 in the post-war decades. But because the vineyard has grown so fast the average holding, a mere 0.7 hectares after the war, reached 1.6 hectares, big enough to provide a decent living on its own. The average figures conceal changes which resulted in the regrouping of the vineyard and the evolution of some substantial holdings. Two laws in 1954 and 1958 made it much easier to bring together the incredibly fragmented holdings characteristic of the French countryside. A government agency, Societe d’Amenagement Foncier et d’Etablissement Rural (SAFER), provided funds, and the Crédit Agricole provided relatively cheap credit facilities. So not only could fragmented holdings be regrouped but fallow land could be reclaimed – as happened most spectacularly at Passy-sur-Marne where 120 hectares were transformed into vineyards
The apparent harmony symbolized by the CIVC hid some explosive potential social conflicts. The most radical French trades union, the CGT, was always very active both in the major firms’ cellars and in their viney
ards. The workers’ power derives from the fact that grapes are a highly perishable commodity. It took only a week’s strike at the end of August 1953 to improve bonuses and holiday entitlements. But the unions were confronted with two problems: not only steadily increasing mechanization, which halved the number of workers in the cellars during a period when production quadrupled (by 1980 you needed only one caviste in the cellars per 50,000 bottles as against 6,000 thirty years earlier, see Chapter 11 for the reasons) but also the swing of power and importance to individual growers – who pay lower wages to the few labourers they employ – and the cooperatives.
THE COOPERATIVES – MORE AND BETTER
The established firms were not the only producers to take advantage of the surge in sales; they were joined by the region’s cooperatives and the thousands of growers who supply them. The attitudes and policies of the cooperatives and their members derive from Champagne’s very special social structure. Cooperation in Champagne is more marked than in other winegrowing areas by the individualism of the growers, itself supported by the nature of the relationship between growers and the merchants which encourages personal contacts.
After the war the movement took off. Thirteen cooperatives were founded in 1948 alone and since 1945 they have been transformed, without any collective act of will, into a major force accounting for around a fifth of sales. They are organized at three levels: the original cooperatives designed simply to press the grapes and perhaps make wines, vins clair which have only undergone their first fermentation for growers in a single village; larger cooperatives, making and bottling the wine; and the handful of ‘unions’, handling between two and ten million bottles, each as large as all but a handful of individual companies. Nevertheless, many of them are still prestateurs de service – they are simply providing a service for their members, not acting as commercial organizations and indeed only forty sell any serious quantity of their own wines. Alain de Villepin, secretary of the Cooperative Federation, pointed out that ‘cooperation in Champagne can bring added value to its members through the services it provides: in other regions the only road open is selling the product.’ In the words of Henri Geoffroy: ‘the members realized that either they had to do it all themselves, or be at the mercy of the trade, or join a union’.
The Story of Champagne Page 15