Champagne prices to rise in UK in 2017 as Brexit impact bites
22/12/2016 17:14
* UK is biggest export market by volume for champagne
* Impact on champagne makers from exchange rates
By Pascale Denis
PARIS, Dec 22 (Reuters) - Champagne drinkers in Britain -
the biggest export market for bubbly - face higher prices next
year as the impact of the shock Brexit vote on the British pound
takes its toll, champagne industry executives warned.
"The market in Britain is undergoing a period of adjustment.
The brands have not yet factored in the effect of foreign
exchange rates on their prices," said Charles-Armand de Belenet,
marketing director for Pernod Ricard's PERP.PA Martell Mumm
Perrier-Jouët champagne brand.
The June vote for Britain to quit the European Union led
sterling to slump to its lowest level since 1985 against the U.S
dollar and to fall against the euro, although it has since edged
back up from those lows. GBP/ urn:newsml:reuters.com:*:nL8N19J4F4
The weak pound makes euro-priced products more expensive in
sterling terms.
French champagne industry executives told Reuters that while
they had managed to offset the Brexit impact to an extent this
year, with some firms delaying price rises, they would have to
raise prices in Britain in 2017 to protect their profit margins.
Bruno Paillard, who heads the Lanson LAN.PA champagne
house, said that while Lanson's sales were showing signs of an
increase from last year, exchange rates remained a worry.
"The question of exchange rates is a cause for concern, it
represents quite a considerable loss of money," said Paillard.
Jean-Marie Barillere, president of the Union of Champagne
Houses, said champagne firms that billed in euros were seeing
their costs go up and their orders go down.
Taittinger head Pierre-Emmanuel Taittinger said his company
had had a "good year, even in England," but Bollinger executive
Jerome Philipon warned champagne drinkers of higher prices next
year.
"The major brands will have to hike their prices from
January onwards. But one price hike still won't compensate for
the hits from the exchange rate," he said.
France exported 150.7 million bottles of champagne in 2015,
worth 2.64 billion euros ($2.76 billion), according to an
industry group. Britain accounted for nearly 23 percent of
France's champagne exports by volume that year, equivalent to
34.2 million bottles.
($1 = 0.9570 euros)
(Writing by Sudip Kar-Gupta; Editing by Adrian Croft)
((sudip.kargupta@thomsonreuters.com; +33 1 49 49 53 84; Reuters
Messaging: sudip.kargupta.thomsonreuters.com@reuters.net))
Keywords: BRITAIN EU/CHAMPAGNE