Bubbly Blues

Not since World War I, when some of northern France's finest vineyards were turned into bloody battlefields, has the French champagne industry seen bigger trouble. Having grown steadily and sometimes spectacularly since the mid-1950s, sales of the French bubbly have been in a steep slide. Last year French vintners were horrified when champagne sales dropped 16% below the 1973 peak of 125 million bottles, to 105 million bottles. This year sales may fall below 100 million bottles for the first time since 1969. "We're not a product of primary necessity," says Jean-Michel Ducellier, head of France's Union of Great Champagne Trademarks, a producers' association. "When everything goes very badly, people should drink champagne to lift their spirits. But they didn't."

Not even, alas, in France. The French, who usually buy two-thirds of their own champagne, have noticeably been cutting back. Britons, who were the French bottlers' biggest customers abroad, have reduced their champagne consumption by a humiliating 63% in the past two years, to an estimated 3.8 million bottles this year. U.S. consumption of French champagne, about 2.6 million bottles this year, has dropped by 40% since 1972, partly because more Americans are turning to less expensive California and New York offerings (see box). Says Napa Valley Champagne Maker Hanns Kornell with satisfaction: "Americans are drinking American these days."

The French producers, who insist that true champagne can only be a product of the special chalky soil and temperate climate of the region that bears its name, blame their sales problem on foreign imitations. They are dismayed by the popularity of Italian sparkling wines and Australian, Russian and even Japanese "champagnes," as well as the U.S. varieties. Battling back, French producers have launched the first publicity drive in the French champagne industry's history. At a cost of $425,000, billboards have been put up in some areas of France and neighboring Belgium that show two glasses raised in a toast and proclaim: CHAMPAGNE--NOTHING REPLACES IT. So far, the producers have resisted the urge to extend the champagne campaign to other countries, however, and even the limited publicity blitz has stirred discomfort in the industry. "It's not the thing to do," says one venerable champagne maker. "Champagne is a luxury product that must maintain its dignity."

Unsold Bottles. It must also hold up its sales. Last year, all of the 30 largest French champagne makers lost money, and inventories of unsold bottles grew by more than 50%. Last September, for the first time in a generation, the price of newly harvested champagne grapes dropped by almost 28%. But recently, with the improvement in economic conditions, champagne sales have begun to pick up mildly in France, and some bottlers are even talking of an end-of-year buying splurge by holiday revelers at home and abroad. Failing that, all is still not lost. "After all," muses Jacques de Vriese, export director of the large Moet & Chandon company, "people will still need champagne for weddings and to launch boats."

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