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Home
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Working Papers
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What future for the Champagne industry?

Working Paper No. 64

Published: 2010
Category:
Business

What future for the Champagne industry?

Aurélie Deluze
Full Text PDF
Abstract
France is one of the largest and most ancient wine producers in the world. Even if its leading position has been challenged over the past decade, France remains a reference in terms of terroir and quality (Anderson, 2001; Berthomeau and al., 2002). Among the different well-known French wine regions, Champagne has a very unique status. Champagne covers less than 4% of the French vineyard whilst representing more than 1/3 of the total of French exports in value (37%).
Several economists (Barrère, 2000, 2001 et 2003 ; Ménival, 2007 ; Rasselet, 2001 ;
Viet, 2003) think that Champagne’s economic success is due to its particular institutional
model, composed of an interprofession, the Comité Interprofessionnel du Vin de Champagne
12
(CIVC) and an AOC (appellation d’origine controlee) , two separate institutions which work
together quite effectively. This model enabled Champagne producers to adapt their offer to the evolving international demand, both in quantity and in quality, and to maintain the equilibrium between grape-growers and Champagne Houses thanks to a fair sharing of the
3
added value. Thanks to the mid-term interprofessional contracts that existed between 1959
and 1989, the CIVC was able to control prices and quantities for a long time. However the liberalization of the markets in the 1990’s led to the end of the interprofessional contracts and grape-price control, which considerably reduced the regulation power of the CIVC. Nowadays it can only control the quantities produced through the management of planting rights and yields at the harvest, which is completed by a “reserve mechanism”.
This model of economic growth has now reached a dead end with the total surfaces of
the Champagne area planted. The situation is unique in the world and leads to the following
paradox: between 2000 and 2007, sales increased much faster than the production. At first, it allowed to reduce huge stocks, but very quickly it resulted in the inflation of the grape and wine prices. This situation, characterized by a lack of control on prices, was called the prosperity crisis. It led Champagne producers to launch a big project to revise the production area, the homogeneity and coherence of which had long been discussed. This working paper aims at answering the following questions: What led the Champagne producers to launch the revision project? How are they going to proceed? What will be the consequences?

Submission

Please send your papers as PDF files to the editor, Victor Ginsburgh, at vginsbur@ulb.ac.be
Papers will be quickly reviewed, prior to potential posting on the website. Decision will be to post or not, possibly with short comments, but without referee reports. The decision will be based primarily on the suitability of the paper’s topic to the aims of the Association.
Such decisions are independent of publication decisions for the Journal of Wine Economics.

Working Paper publication requires that at least one author
is a regular member of AAWE.

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