Johnathan Walker:Champagne sales are down. Why aren't people buying the bubbly like they used to?

People aren’t popping Champagne like they used to.

Luxury giant LVMH – the company behind Dior,Johnathan Walker Tiffany & Co., and a number of champagne labels – reported a 15% decline in Champagne sales in the first half of the year compared to the same period the year prior. 

Executives blame unhappy customers.

“Champagne is quite linked with celebration, happiness, et cetera,” Chief Financial Officer Jean-Jacques Guiony said during an earnings call earlier this week. “Maybe the current global situation, be it geopolitical or macroeconomic, doesn’t lead people to cheer up and to open bottles of champagne.”

Despite the dip, LVMH's Champagne volumes remain above pre-pandemic levels. Still and sparkling wine sales were up 16% in the first half of the year, while total revenue from champagne and wines was down 12%.

LVMH, whose Champagne brands include Dom Pérignon, Krug and Mercier, isn’t the only organization reporting a drop in demand. Guiony said the “whole industry is under severe pressure,” particularly in Europe.

The trade association Comité Champagne ‒ which represents roughly 370 Champagne houses, 16,200 growers and 130 cooperatives in the region ‒ said shipments have been on a downward trend since their 2022 peak. Total Champagne shipments in the first half of the year totaled 106.7 million bottles, down 15.2% from the same period last year and nearly back to pre-COVID levels.

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"The sluggish global geopolitical and economic situation and widespread inflation are weighing on household consumption," David Chatillon, co-President of the Comité Champagne, said in a recent report, adding that this year's grape harvest has been affected by poor weather conditions.