Chris Shanahan: Champagne to expand

Coonawarra’s prolonged, and at times bitter, boundary dispute of the nineties pales in comparison to what’s being unleashed in France’s Champagne district. For the first time since the 33,500-hectare growing area was defined in 1908, there’s to be a major expansion of the number of communes permitted to grow Champagne grapes. With two communes sacked and forty promoted the number is set to increase from 319 to 357.

While the website of the region’s controlling body, the Comité interprofessionel du vin de Champagne (CIVC), is surprisingly mute on the topic, the world’s newspapers are running hot with the news.

Much of the focus is on the windfall for those within the new boundary and the bitterness sure to be felt by those that just miss out. Several sources, including Decanter magazine and Guardian News & Media, carry this wonderful quote from Gilles Flutet, a member of the body that made the announcement, “If your vines fall on the wrong side of the divide, they will be worth €5,000 a hectare. On the other side they will be worth €1 million.”

For the winners, it’ll be like waking up in the morning to find someone’s replaced your old Vespa with a new Rolls Royce. And the proposed winners are to be announced by the Institut national de l’origine et de la qualité (INAO) over the fifteen days following their March 13 decision to expand the region.

The Guardian News & Media illustrates the depth of local rivalries with this quote from Sylvie Le Brun, a farmer from Montmirail, “At a dinner party Saturday everyone was saying, ‘I hope the neighbours aren’t chosen.’”

With a review period to follow the announcement, it’ll be about a year until we see where the final boundaries lie and another decade or more before new planting move into full production.

But even before this relatively small expansion, Champagne was a huge producing region – especially given its position at the luxury end of the market.

While the official maximum area for vines is set at 33,500 hectares, INAO figures show that in 1995 there were 30,659 hectares in the ground. Between 1999 and 2006 this expanded by about 300 hectares a year to reach 32,626 hectares, leaving little, if any, scope for further expansion.

To view Champagne’s scale from an Aussie perspective, in 2006 Victoria had 39 thousand hectares under vines, New South Wales 40 thousand hectares, Western Australia 12 thousand and the whole country 169,000. Champagne, then, has two and a half times more vineyard land than Western Australia and only a little less than either Victoria or New South Wales.

But the comparison becomes even starker when you compare Champagne with a single, Aussie premium region. In a good year, by my estimate, Coonawarra might make fifty million bottles of wine – about one-sixth of Champagne’s 330 million bottle output.

The French drink over half of that. But in 2007 the region exported 150.9 million bottles (up seven per cent on 2006) to over 190 countries, putting leading Champagnes amongst the most recognised luxury brands in the world.

While articles about the region’s expansion talk of surging demand in China, India and Russia, the real action remains amongst the developed nations.

In 2007 the top-ten markets slurped down eighty per cent (121 million bottles) of Champagne’s exports. The UK topped the list at 38.9 million bottles, followed by the USA on 21.7 million, Germany on 12.9 million, Italy on 10.3 million, Belgium on 9.9 million, Japan on 9.1 million, Switzerland on 6.1 million, Spain on 4.6 million, the Netherlands on 4.1 million and Australia on 3.3million (up 12 per cent on 2006).

Now the Champenoise are masters of luxury-goods marketing. They think long term, protect their brand aggressively and spread their sales over many markets (knowing that when some are up, others are down).

This long-term approach probably drives the current expansion plans. If Russia, China and India are small markets now, where might they be in ten or twenty or thirty years? Sales to Russia in 2007, for example, were up forty one per cent on 2006, and those to China up thirty per cent.

But what can we expect from a quality perspective? Why were boundaries guarded so jealously for one hundred years, only to be expanded as production peaks and demand soars?

Old vignerons will always tell you of any wine region that they didn’t plant the worst land first. This is as true in Champagne as it is anywhere.

In all likelihood, in my view, the expansion may swell the volumes of middle-of-the-road Champagne and the pockets of those who make it, but most of the world won’t notice.

There’s already a huge quality chasm within Champagne. Where once, in Australia, we might have perceived three broad quality levels – non-vintage, vintage and de-luxe blends (like Moet’s Dom Perignon), many consumers now know that quality varies widely within any of these groupings.

As well, there’s an increasing recognition of Champagne’s vineyard ranking system, and an appreciation that the best wines come from the top vineyards. We’re increasingly seeing vineyard rankings featured in PR material from Champagne houses. And there’s a growing number of single-vineyard, grand-cru-vineyard only and single-varietal Champagnes coming onto the market.

At Bass Phillip Winery, for example, I enjoyed with proprietor Phillip Jones an extraordinary single-vineyard, all pinot noir Champagne from the village of Ambonnay – Egly-Ouriet Brut Grand Cru 1996 – imported by Prince Wine Store, Melbourne.

Wines like that will only ever be niche players. They’re at the tip of the Champagne quality pyramid and remind us, sadly, that the base of the pyramid is about to become bigger.