By Saabira Chaudhuri
LONDON-- Brexit is taking some of the fizz out of the U.K. Champagne market--one of the bubbly French wine's most important.
Champagne exports to the U.K. dropped in 2016 by 14% in euro-denominated revenue, while sales by volume fell 8.7%, according to new data from the trade association Comité Interprofessionnel du Vin de Champagne.
The steep slide was due to Britain's June 23 vote to leave the European Union, which has sent the pound down 12.5% against the euro--and pushed up prices of bubbly for Britons.
Despite its relatively small population, Britain punches above its weight when it comes to Champagne consumption. It is the French wine's second-biggest export market by revenue, behind the U.S., and the biggest export market by volume.
The fall in shipments to a close-to-home market has pushed Champagne vintners to look further afield for growth, particularly toward the U.S., China and India, according to Jean-Marie Barillère, co-chairman of the association.
Champagne shipments to the U.S. rose 4.9% by revenue and 6.3% by volume last year. While the U.S. market is larger than Britain by sales--EUR540.1 million ($580 million) to the U.K.'s EUR440.4 million in 2016--Britons imported about 50% more of the stuff. France sent 31 million bottles to the U.K., compared with 22 million to the U.S. Executives say Americans typically are brand-conscious, choosing to buy more expensive Champagnes than their European counterparts.
There is plenty of room to grow in the U.S., the association said. On average, makers in 2016supplied two bottles per person in France, a bottle for every person in Switzerland and half a bottle for every Briton--but just seven-hundredths of a bottle for every American--less than half a glass.
U.S. customers turn to the drink to mark celebratory occasions, rather than for the more regular consumption seen in some European markets.
"Champagne is for a celebration day, not for conviviality or relaxation like the evenings you have in Europe," Mr. Barillère said. "There's a lot to do there to raise consumption."
Big Champagne makers are sharpening their focus on the U.S. market in an attempt to push pricier offerings.
Pernod Ricard SA in November named athlete Usain Bolt the "chief entertainment officer" for its Champagne brand Maison Mumm, with the long-term goal of making Mumm the country's top Champagne. Pernod Ricard's Champagne brands accounted for 4.3% of the global market in 2015, according to Euromonitor, well behind rival LVMH Moët Hennessy Louis Vuitton SA's 24.4% share.
Some U.S. restaurants and bars are shifting to serving Champagne in wine glasses rather than flutes, to encourage people to drink it throughout a meal rather than just before or after it, according to Jennifer Hall, a representative for the U.S. Champagne Bureau.
Ariel Arce, owner of the Champagne bar Riddling Widow in New York's Greenwich Village, said serving Champagne in wine glasses helped it aerate, but also made drinking it less intimidating.
Ms. Arce keeps costs low at her bar, which fits 16 people, serving lower-priced Champagne at $75 to $90 a bottle.
"It's kind of a scary product for the average consumer because of how expensive it is," Ms. Arce said. "We have small spaces with very little overheads that strip away [the] glitz and glamour that comes with a glass of Champagne and focus on how to make it fun."
The French remained the biggest consumers of Champagne, but volumes there declined 2.5% in 2016 as terror attacks kept tourists at bay, Mr. Barillère said. Belgium, another big market, saw volumes drop 9.5% on the back of a rise in import taxes. Overall, Champagne shipments globally dropped 2.1% by volume and 0.6% by value in 2016 from 2015.
Write to Saabira Chaudhuri at email@example.com
(END) Dow Jones Newswires
March 20, 2017 12:53 ET (16:53 GMT)
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