Champagne expands domain to answer demand surge

By Brian Rohan

PARIS (Reuters) - Faced with surging demand, France's champagne producers have decided on a very simple way to boost production -- by widening the vineyard.

A decision made by a French agricultural body on Thursday will allow producers to extend the area in which they are allowed to make the world's most famous sparkling wine, until now restricted by a law dating back to 1927.

Sparkling white or rose wines are made in many parts of the world but only producers in a designated region of eastern France have the right to call their product champagne, under laws that establish it as a "controlled term of origin", known under its French acronym AOC.

Demand for the wine, one of France's best-known exports, has skyrocketed, with growing appetite from China, Russia, and emerging economies as well as traditional markets in Europe, pushing sales to around 5 billion euros ($7.8 billion) a year.

Thursday's unanimous vote at the National Institute of Origin and Quality (INAO) approved a report recommending an increase in the number of rural districts allowed to use the champagne ticket to 357 from the 319 allowed under the 1927 law.

"It formalizes the organization of the geographic area into two zones: the working zone of 675 districts, and the (grape) production zone of 357 districts," INAO said in a press release.

Protection of food names based on geographic criteria is a global phenomenon, but it is more prevalent in Europe, where it thrives due to old traditions and newer legislation in Brussels.

Parma ham, Feta cheese, and Luebeck marzipan have similar geographical indications as outlined in European Union law, but champagne stands out among other products because of its international recognition and massive sales.