Deep discounts drive Champagne sales

Deep discounting over the Christmas period in the UK and France has led to Champagne volume growth in the major multiples but also one bankrupt supplier.

Asda sold almost 250,000 bottles of £10 Champagne in the last week of December

Retailers in Champagne’s two largest markets employed aggressive price cutting tactics to entice shoppers during December, while suppliers of inexpensive supermarket labels struggled to make money as they attempted to absorb the increasing cost of grapes.

The latest figures to be released in the UK show that supermarket chain Asda achieved a 25% increase in Champagne sales over December from an aggressive deal on its exclusive label Pierre Darcys.

Having slashed its price from £23.98 to just below £10 a bottle, the supermarket reported sales of almost 250,000 bottles in a single week in the run up to New Year’s Eve.

Overall Champagne sales at Asda were up 17% in 2012 compared to the previous year, increasing the retailer’s share of the Champagne market by 1.7%.

Certainly the supermarket’s Christmas Champagne deal was the most aggressive year-end offer in the UK market, with the next cheapest bottle available at Tesco, where De Vallois had its price cut from £28.99 to £14.49.

Nevertheless, Morrisons had previously offered the deepest discount, having cut the price of its Hubert Marie Champagne from £28.99 to £10 for one week only until Sunday 2 December 2012.

For suppliers however, rising grape costs in Champagne are making it increasingly difficult to provide Champagne at such low prices.

Indeed, as previously reported by the drinks business, one supplier of several exclusive Champagne labels, Pressoirs de France, has gone into administration, unable to make a profit on bottles sold for as little as €8 a bottle.

Although UK retailers were certainly aggressive in their Christmas Champagne deals, the discounts were deepest across the Channel in the French supermarkets.

Leclerc sold Champagne in a half price loyalty card deal which allowed shoppers to effectively buy a bottle for €5.45

Retailer Leclerc was even selling Champagne in a half price loyalty card deal which allowed shoppers to effectively buy a bottle for €5.45 (€10.90 would buy them a bottle of Champagne and a €5.45 voucher to spend on food in-store the following day).

The Champagne for this offer, the Laurence D label, was supplied by Nicolas Dubois of the now bankrupt Pressoirs de France.

However, Asda’s Pierre Darcys label was supplied by cooperative Union Vinicole des Coteaux de Bethon (UVCB), which is also producer of the Paul Laurent brand.

Despite the depth of the Champagne discount at Asda, sparkling wines outsold Champagne at the retailer, with Cava and Prosecco spearheading volume growth.

Together, Champagne and sparkling wine enjoyed 28% year on year sales increase at the supermarket in 2012.