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Business News of Thursday, 28 May 2020

Source: reuters.com

Coronavirus: Champagne sales sink in a world with little to celebrate

Global champagne sales are forecast to slump by a third, or 100 million bottles, this year as the coronavirus crisis shuts bars and restaurants worldwide and hammers economies.

The collapse is akin to a wartime depression, the champagne producers’ group CIVC told Reuters on Thursday. Lost sales could total over 1.7 billion euros ($1.9 billion) in 2020, and the downturn could last for many years, it said.

“When someone looses a job or someone dies in his family, they don’t want to celebrate, so we’ll certainly see that risk hitting us for several years,” said co-chairman Maxime Toubart.

The sales estimates are based on a 75% fall in April and May, and Toubart’s CIVC co-chairman Jean-Marie Barillere predicted they would remain below-average until the end of the year, including the festive holidays.

“We hope it will improve when hotel, cafes and restaurants reopen and people return to a more normal and more optimistic life, but it is hard to say how fast that happens,” he said.

“We are preparing to difficult times ahead.”

Last year champagne producers sold nearly 300 million bottles for a record 5 billion euros.

A rebound in sales to key export markets will not be instant, including the United States where a sharp rise in unemployment may change consumption patterns, Toubart said.

The price of some champagne could fall later this year if producers seek to sell their surplus in bargain sales.

In a bid to cut stocks, CIVC decided on Thursday that some of this year’s grape harvest will not be allowed to be bottled until 2022.

Spain’s cava producers also expect to be severely hit by the crisis but Italian prosecco makers have seen sales edge higher.

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