Champagne sales suffer because of shipping issues caused by the uncertainty surrounding UK's Brexit and the Gilets Jaunes (Yellow Vests) protests in France. The international trade of champagne is reliant on good political climates, especially because the product is so region-specific. A further drop in shipments could significantly impact the champagne industry.
The political climate in the UK and France are essential for the success of the champagne industry. The beverage is produced in the Champagne region in France, so naturally any political instability in the country would affect its sales. Roadblocks set up during the protests barred a lot of retailers from making consistent deliveries during the holiday season. The UK is champagne’s second largest market, so exporting bottles across the English Channel is vital to the success of the industry. With the two recent events, it’s no wonder the industry was greatly affected.
It’s estimated that the Champagne region shipped around 302 bottles in 2018—dropping 5 million bottles from 2017’s yield. The shipment numbers are not only significantly lower than last year, but they would be marked as the lowest number since 2009, during the global financial crisis. This drop is attributed with the demand for inexpensive champagne only, as higher-end champagne is still enjoying success.
Brexit has greatly affected not only the champagne industry, but majority of the European trade. The deal has undone years of established business practices and relationships, and uncertainty will continue until a solid deal is made by government officials. The Gilets Jaunes protests that happened at the end of last year brought a lot of domestic security concerns, and riots in Paris only made the political situation seem even more unstable.
An unstable political climate could be one of the most plausible explanations for a sudden drop in champagne demand. As the situation gets more uncertain, consumers will be less likely to spend frivolously. Champagne is not a staple product, and it’s quite uncommon to have it as an everyday beverage; after all, “popping champagne” is usually attributed with special occasions. Until people are reassured of the political situation’s stability, the only thing that will pop is the champagne industry’s sales expectations.