More contentious was the elaborate system of rationing the grapes and vins clairs. In times of shortage the merchants were allocated grapes on the basis of the previous year’s sales. This naturally struck the smaller, quality-conscious houses as unfair. In the words of André Lallier of Deutz: ‘It posed a great problem in the 1960s and 1970s for firms which were not growing and not buying sur lattes. If they were buying then they automatically got an increased allocation of grapes the following year since allocations were decided on a percentage basis.’ Lallier protested, but was alone in refusing to sign the 1975 contract. This did not hurt him. The next year he was offered over twice his allocation of grapes.
The shift away from France towards foreign markets has enabled the merchants to take the initiative away from the individual growers and the cooperatives. But only a few merchants are benefiting, some because they are so big, others because of their rock-solid worldwide reputations. For the scene changed in the boom years. In 1963 the ten biggest firms controlled only 55 per cent of the business, the next thirty had 36 per cent and the remainder 9 per cent. By 1982 the ten biggest accounted for over 70 per cent, the middle thirty for a mere quarter, while the smaller houses – of which there remain a hundred or more – held only 4 per cent of the market. Such a trend inevitably threatens any small or medium-sized house without any special advantages. All the firms, big and small, were acutely aware that they dare not let their reputations slip. So they all had to reduce sales at the turn of the decade. Claude Taittinger made a virtue of this, trumpeting, quite rightly, that ‘between 1978 and 1983 our sales went down by 25 per cent – voluntarily, deliberately, to maintain the quality of our wines. We were determined that the small harvests of 1978 and 1981 should not affect our quality.’
Outside France the CIVC took over the job of protecting the good name of Champagne performed for the previous half-century by the Syndicat. It was lucky to recruit Joseph Dargent, a lawyer with an astonishing physical resemblance to the late President de Gaulle. Luckily Dargent had done a thesis on British law, because his most famous case concerned so-called ‘Spanish champagne’ and was decided in an English court.
‘SPANISH CHAMPAGNE’
The promoter of the ‘Spanish champagne’ imported by the Costa Brava Wine Company was Michael – later Sir Michael – Grylls, the very model of a posh crook. In 1955 this son of a brigadier, a former officer in the Royal Marines went into the business of importing Spanish wines. Even before his attempts to import Spanish champagne he had been found guilty of avoiding the strict controls regarding foreign exchange.
Grylls had discovered Spanish sparkling wine when he was on holiday on the Costa Brava in the early 1950s. With money from one of Spain’s richest men, Miguel Mateo, Grylls founded the Costa Brava Wine Company and imported Perelada sparkling wine, which he then advertised as Spanish champagne. Faced by this overt challenge the CIVC and the leading champagne houses faced a difficult choice: they could launch a criminal prosecution under the Merchandise Marks Act, trying to prove that it was false and misleading to describe Perelada – which, unlike later Spanish sparkling wines, was not even made by the méthode champenoise – as champagne. The alternative was the less obvious route through a civil action for passing off Perelada as champagne. The lawyers preferred a civil case. It would not involve a jury and although the legal path would be longer and more complicated, it would establish a general proposition, whereas even a successful criminal prosecution would not necessarily prevent other imitators from trying their luck.
But Robert-Jean de Vogüé, having failed to do a deal with Senor Mateo, wanted the most public spectacle possible.45 He thus put the English wine trade in a difficult position. As Robert Keeling, the CIVC’s solicitor, put it:
Many whose trade had been built up on the imitation wines such as ‘Spanish Graves’ and ‘Spanish Sauternes’ feared that if the Champagne interests succeeded, a wholesale introduction of the system of appellations contrôlées would follow in England, with disastrous results for their business. Many, too, sympathised with the form of the action, and sympathised with this young man and his young company who were, they thought, being dragged like criminals by the Champagne interests to the Old Bailey. Many failed to understand that the prestige not only of Champagne but of the British wine trade was in the balance.46
Although the judge summed up in favour of the prosecution as far as he decently could, the jury clearly shared the trade’s view that Goliath was being rather beastly to David and found for Costa Brava on Christmas Eve 1958. The French were furious. They can never understand that British justice really does attempt to be impartial and independent and assumed that it was all a plot to sabotage the French – who had just helped form the European Economic Community. The French Embassy in London was so frightened of the row that it tried to persuade the Champenois to abandon the case, but they were not to be deterred.
The second legal battle started in November 1959 with a convoluted technical discussion on whether the concept of ‘passing-off’ was applicable. It was found to be. But in the main action, which started a year later, the Champenois had to prove, not only that the name was a false description, but also that damage had been done – that drinkers could be deceived into believing they were buying champagne. The defence naturally quoted the case of Spanish Sauternes and the like, and found Russian and even Persian champagne mentioned. Parallels were drawn between Cheddar cheese and champagne (which gave the judge an opening for a bon mot on how cheese seemed to be as different from wine as was chalk).
The Champenois’ lawyer, Geoffrey Lawrence QC, was a specialist in criminal law, but brilliantly turned the judge’s mind at a crucial moment described by Keeling:
The judge posed an imaginary situation where some ignorant person orders champagne, but says to the waiter that it is rather expensive. If, said the judge, the waiter then offered Perelada, would he not add, ‘but of course that is not French champagne’. This was the heart of the case and Mr Lawrence saw and took his chance. ‘My lord, if he said “not French champagne”, he would mean, “it is not French champagne it is Spanish champagne, but whether you have French champagne or Spanish it is still champagne.”’
Perelada had made matters worse by publishing a brochure called ‘Giving a Champagne party’ and the judge was quite clear that: ‘On its face... it is quite plainly intended to cash in on the reputation of Champagne.’ On 16 December the judge found that Costa Brava had been guilty of dishonest trading and ordered the firm to obliterate all mention of the word champagne from its labels within forty-eight hours. The case concerned more than champagne. It warned the public that imitations of the names of fine wines were rife, and served notice to the trade that there were limits to the extent to which it could pass off fraudulent products. Nothing daunted, Grylls went on to become a Conservative MP, was knighted and became chairman of an important Committee in the House of Commons. In the early 1990s he was implicated in a major scandal involving the payment of considerable sums of cash to MPs in return for asking questions in the House of Commons but died in 2001, before being formally accused.
Outside Britain, Dargent once told me how: ‘the case was very useful in countries which had been part of the British Empire, or where there were no precedents.’ In Bermuda the Champenois soon sent packing a so-called ‘champagne’ made by the Gallo brothers in California, and the British precedent also helped in Canada. Later the New Zealanders, who marketed a ‘champagne’ called Lindauer (and very good it is too) have accepted the CIVC’s arguments.
With the Russians Dargent tried personal diplomacy: ‘they knew the rules very well’, he says, and the point was rubbed home when Nikita Krushchev visited Reims in the 1950s and was greeted by a double rank of workers holding bottles which they popped as he passed.47 Until recently, and because of past failures the CIVC could not prevent the indiscriminate use of the word ‘champagne’ in the United States, and elsewhere it simply cannot afford to fight too many battles simultaneous
ly. ‘We try to keep our sense of humour and not go to law,’ said André Enders, the director of the CIVC in the 1980s. This has not prevented them from pursuing what the CIVC called ‘parasite’ products. A company making a ‘champagne’ deodorant in Austria and another a ‘champagne’ shampoo in Germany were sued. So was Perrier, which had advertised itself as the ‘Champagne of sparkling water’ in Germany. Nearer home the French state cigarette monopoly was attacked when it proposed to market a Champagne cigarette.
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40Wines already in bottle.
41See page 222
42His father had always said that only three Lansons should work in the business, in Reims anyway, at the same time.
43Alain de Polignac thoroughly approved. He imagined the ghost of his grandmother, a true gourmet, sniffing the culinary odours appreciatively.
44The 1984 crop barely covered sales, and 1985 fell 40 million bottles short, enabling the stock to be eliminated. The actual costs had been small since the stock was in the form of vins clairs.
45Nominally the case was brought by Bollinger as being the first in alphabetical order of the twelve major importing houses, but de Vogüé, the leading importer, was inevitably the moving spirit. He had already persuaded the twelve to finance a Champagne Academy. This provides young professionals in the wine trade with a short intensive course to indoctrinate them into the Champagne religion. The Academy’s standards are, surprisingly, quite high, although I know of only one student failing the exams, and that because he was too drunk to write the answers.
46In History of Champagne, Andre Simon.
47A trick which de Vogüé repeated when Alan Whicker made a television film about him.
8
INTERESTING TIMES
The Chinese employ the term ‘May you live in interesting times’ as a curse and the situation has been somewhat like that for the Champenois since the mid-1980s. Sales-wise, as so often in the past, they’ve been buffeted by the economic hurricanes suffered by the industrialized world. So Champagne has been fighting a defensive battle on two fronts; boom-and-bust world economic trends and the ever-increasing quantity – and quality – of the world’s other sparkling wines, of which it only has less than a tenth of the market. As a result, the Champenois can only compete by improving the quality of their wines and, a relatively new development, promoting different types of champagne. The Champenois are fully aware of the need for quality – which has greatly increased over the past thirty years and continues to improve, but they also recognize that the boom in other sparkling wines is also an opportunity when drinkers can afford to move up-market. As Julie Campos, managing director of Nicolas Feuillatte, told the magazine Drinks Business: ‘If we don’t use sparkling wine sales as a sounding board to improve our own sales we are being extremely negligent; the growth in sales of sparkling wines from around the world should be used as an opportunity for Champagne.’
There have been so many fundamental and unprecedented changes in the making and marketing of the wines of Champagne that you can no longer talk of champagne as a single wine but, for the first time in its long history, of the region’s often very different wines.
Structurally, and as is happening in many branches of the alcohol industry, in Champagne the ever-increasing domination of a small number of groups offering a range of wines is being matched by a steady increase in niche producers, in this case by individual growers who are selling their own produce, often of a superior quality, while – and here Champagne is an exception – some of the region’s major cooperatives have succeeded in exporting their own brands. Although sales by the growers and the cooperatives were slightly down in 2015 they still represented 61 and 28 million bottles respectively as against 223 million by the merchants.
Many of the cooperatives have so improved the quality of their wines that they feature on everyone’s lists. Sometimes this is because they are well situated like St Gall and Palmer; sometimes, as in the case of Pannier in the Aisne and Devaux in the Aube they have successfully fought against historic snobberies, against the Pinot Meunier and the wines from the Aube respectively; and sometimes, as with Jacquart and Nicolas Feuillatte, by simply having an enormous quantity of wine available and with it the ability to choose the best and sell it as a serious brand.
Economically, recent decades have provided a bumpy ride, accentuated by the way the French market has stagnated during the twenty-first century. Of course the phenomenal rate of growth seen in the 1960s and 1970s could not continue, though sales did rise from 125 million bottles in 1990 to 160 million in 1996 – with exports contributing a further 95 million. Then came the millennium, an event for which the Champenois’ attitude rightly combined excitement and apprehension. In 1999, world sales jumped by over a tenth to reach over 300 million bottles for the first time.
As a result, every house, well at least thirty-seven of them, felt that they had to launch a special ultra-premium cuvée often in the form of jereboams, acting on the assumption that they would be drunk at millennial parties. Roederer started the race with a ‘Collection 2000’ of Methusalems of Cristal followed by Perrier-Jouët, a special Dom Perignon was offered, while Clicquot launched its Trilennium of 1989, 1988 and 1985 rosé. Two of the most exotic – and expensive – offerings came from Gosset and Ruinart. The Year 2000 Gosset Celebris Prestige Cuvée came with a digital watch that counted down the days to the millennium. But Ruinart was the clear winner in the Bling 2000 competition. Its special L’Exclusive – a magnum – was ‘tightly enchased [sic] in a filigree of silver plate’ created by the leading silversmiths Christofle’.
No one seems to know if all – or indeed – any of these cuvées sold out but what is sure is that the Champenois suffered an appalling hangover in 2000 with total sales down by a quarter while sales to Britain fell by 40 per cent. Since then sales have never recovered to the 1999 figure of 327 million. The Champenois faced some intractable problems, primarily stagnation in traditional markets coupled with the failure to penetrate new markets.
Notably unlike their brothers in Cognac, they have not been able to penetrate the market in China. Even today this still takes just over a million bottles, fewer than go to Hong Kong – or indeed to each of three of France’s overseas possessions, Guadeloupe, Martinique and Réunion. Exports may account for nearly a half of total sales by volume and well over a half by value – when the French market was booming they had amounted to a mere third – but the list of the top ten importers, which account for four-fifths of sales outside France, includes only two newcomers, Australia and Japan. Like so many producers of consumer products the Champenois have great hopes of sales in Africa, where sales doubled, though only to 5 million bottles, in the ten years to 2014, but these are volatile markets and apart from Nigeria and South Africa sales are largely confined to France’s former colonies.
Most of these markets tend to buy superior qualities, so where value is concerned Japan is a bigger market than Germany, traditionally the third biggest market by volume at least. Since 1945 the growers have been able to command ever higher prices for their precious grapes, about €6 a kilo. As a result, producers without a well-known brand are squeezed by the purchasers in the ever-more price-conscious ‘grande distribution’– the super- and hypermarkets in three of Champagne’s biggest export markets, the UK, Belgium and Germany. The outcome of this is that UK sales of 34 million bottles are less profitable than American sales of 20 million bottles. Fortunately, the French market, historically notorious for the competition which drove prices down to rock-bottom levels, is improving. Although the level of total sales has been stagnant for nearly two decades the grande distribution now accounts for a mere quarter of consumption, with the majority of sales being made in quality-conscious outlets including cafes, hotels and restaurants but also through direct sales and specialist wine stores.
Despite its problems Champagne remains a major industry. The Champenois do not like the idea that theirs is an industrial wine, but in some way
s it is, with a turnover of €4.75 billion in 2015 and 25,000 direct employees. (They prefer to think of it as ‘technological’ as well as involving highly sophisticated salesmanship, dissipation and conspicuous consumption.) Champagne remains the biggest single factor in French exports of wines and spirits – themselves greater than those of any other French export except aircraft. Indeed, sales of champagne represent nearly a quarter of the total value of France’s wines and spirits, even though the number of bottles sold is little more than a twentieth of the total.
THE NEW ‘CHAMPAGNE EMPIRES’
Over the past thirty years the three forces in Champagne, the merchants, the cooperatives and individual vignerons have all adapted in the face of the new challenges. Nevertheless, the heritage of Robert-Jean de Vogüé remains triumphant, though it is now merely one subsidiary of LVMH, the world’s biggest collection of luxury brands. Fortunately, the chairman, Bernard Arnault, cherishes the quality, as well as the profitability of the brands LVMH has absorbed over the past thirty years. Today the group owns Moët and Veuve Clicquot as well as Mercier and Ruinart. But of course the star performer is Dom Perignon, the biggest and most profitable luxury brand in the history of wine, which is estimated to sell 4 million bottles per year – Moët has never given even a hint of the figure! For a short time LVMH also owned Pommery and Lanson which it sold on, having absorbed the two firms’ extensive and – in the case of Pommery – prestigious vineyards, which have proved extremely useful in finding grapes good enough to use in Dom Perignon,
Moët’s development is largely the result of a decade of upheaval in the 1980s initiated by the late Joseph Henriot. Descendant of a long line of growers, he inherited a genuine passion for fine champagne. His family’s wines – most of which are sold to fifty thousand private clients within France – are traditional, elegant, if anything rather austere. But there was another Henriot, the saturnine, secretive financier, buyer and seller of companies. In 1983 he bought Charles Heidsieck, Trouillard and de Venoge – the latter two best known as suppliers of ‘own brand’ champagnes. Henriot stripped them of their stocks, then sold them again, Charles Heidsieck to Rémy Martin, Trouillard and de Venoge to a local entrepreneur.
The Story of Champagne Page 17