Champagne loses its fizz following Russia labelling rules and weak EU exports

Champagne sales from the EU have fallen and Russia has enforced a new rule, forbidding EU producers from labelling their product as the Russian word for champagne. [SHUTTERSTOCK]

French champagne producers will ring in 2022 with at least one hiccup — starting Saturday, they must comply with a new Russian law prohibiting them from calling their bubbly by its Russian name, an affront that has infuriated the industry.

President Vladimir Putin signed the legislation in June, making it illegal for imported champagnes to use the Russian translation, “Shampanskoe,” on their bottles.

French producers can still use the word in French but will have to write “sparkling wine” in Cyrillic on the back of bottles — a heresy for houses that claim nothing can match their unique splendour.

They have fought for years to safeguard their AOC, or Controlled Appellation of Origin, for exclusive worldwide use under the provisions of the 1958 Lisbon Agreement on distinctive geographical indications.

But Russia is among several countries — including the United States — that are not signatories, and talks aimed at convincing Moscow to repeal the law have failed so far.

In October, however, France managed to secure a two-month moratorium that would allow them to sell stocks already sent to Russia while removing “Shampanskoe” from their export labels.

“It allowed us to ensure that non-conforming bottles sent before July could be sold,” the Comite Champagne industry body said in a statement.

Talks continue in the meantime, an official in the French trade ministry, who asked not to be identified by name, told AFP.

“We remain mobilised, with the European Commission, to keep working on this matter and defend our wine and spirits industry, including champagne,” the official said.

Russia is the 15th-largest export market for French champagne, with 1.8 million bottles sold in the country in 2019 — or 1.5 percent of overall sales.

But for the Comite Champagne, “it’s a promising and high-value market.”

“Russian consumers appreciate prestigious vintages and also enjoy champagne while visiting France,” it said.

EU champagne exports fall flat

The European Union’s exports of sparkling wine to the rest of the world fell last year for the first time in a decade, Eurostat said on Friday, largely because of a massive drop in champagne sales, though prosecco and cava sold well.

The COVID-19 pandemic dampened wine trade globally in 2020, the latest year for which data are available, as restaurants and bars remained closed for long periods.

Champagne was hit the hardest. Sales outside the EU of the famed French sparkling wine fell over 20% by volume to 66 million litres in 2020 from nearly 84 million litres the previous year.

That largely contributed to a 6% overall drop in EU exports of sparkling wines last year compared to 2019, the Eurostat data showed.

EU exports fell from a peak of 528 million litres in 2019 to 494 million litres in 2020 – still nearly twice the level recorded in 2010.

Of the three main categories of sparkling wine exported from the EU, only champagne recorded a significant drop by volume.

Prosecco, which is by far the most exported, recorded sales outside the EU of 205 million litres in 2020, compared to nearly 207 million litres in 2019.

Cava, which is produced in Spain, bucked the trend by increasing its extra-EU exports by more than 10% to 58 million litres in 2020, getting closer to replacing champagne as the second most sold EU sparkling wine outside the 27-nation bloc.

Total champagne sales, including in the EU, fell 18% last year by volume, producers’ group CIVC has estimated.

Despite the drop in sales by volume, vintage champagnes have proven a lucrative draw for investors this year, outperforming all major financial market assets from Big Tech to bitcoin. Salon le Mesnil’s 2002 vintage surged more than 80% in value in 2021 on online platforms.

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