Champagne discounting a bilateral challenge

29 November, 2013

Champagne houses and supermarkets must take equal responsibility for overly discounted Champagne in the UK, according to Nicolas Feuillatte's commercial director.

Julie Campos told Drinks International that over the last ten years UK consumers have become “accustomed” to “deeper and deeper promotions” in supermarkets and Champagne houses just need to decide to be “in or out”.

She said: “If you want to be a serious partner to any retailer you have to understand their mandate, which is to offer effective promotions for the consumer. [On discounts] you do not have a choice, but the [supermarket] buyers do not have a choice. It’s not a pricing situation it’s an addiction to promotion.”

Campos said that though Nicolas Feuillatte is a major player in supermarkets, she is “against false price points” and supportive of “value added promotions”.  

Around 90% of Champagne is on promotion in the UK, Campos estimated, compared to France, which is about 35% but heading towards heavier discounting.

Asked about the profitability of Champagnes selling for as little as £9.99 in British supermarkets, most recently Asda, Campos said the grapes alone would cost €6-7 per bottle and opined the price would likely be “below the replaceable cost” of the Champagne.

Despite the problems in the UK, Campos said it is an important market and that she is not “fatalistic” about its discounting culture. 

Early forecasts are that Nicolas Feuillatte, which is the world’s third biggest Champagne brand, will grow volumes by 4-5% this year. Value growth has not been disclosed.

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