Cham-pain: grape harvest cut as pandemic crushes bubbly sales

PARIS (Reuters) - France’s champagne makers reached a last-minute agreement on Tuesday to cut the volume of grapes they will harvest this year by more than a fifth as they try to cope with a collapse in sales caused by the coronavirus crisis.

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With harvesting off to an early start after warm, dry weather this year, producers struck a deal to reduce grape volumes to 8,000 kg per hectare, down nearly 22% from 10,200 kg in 2019, the CIVC industry body said.

Producers have been locked in talks for weeks over harvest output. Leading champagne houses have pushed for a steep fall to shore up prices, while some growers wanted a smaller reduction to take advantage of a promising 2020 crop.

With the world still grappling with the COVID-19 pandemic ahead of the crucial year-end period for champagne sales, the industry took the unprecedented step of agreeing that some of this year’s harvest could be held back from use, the CIVC said.

A 1,000 kg per hectare portion of the harvest will only be used this season if demand is sufficient, it said, potentially cutting the volume of pressed grapes to 7,000 kg per hectare.

“It was a compromise that caused some pain,” Jean-Marie Barillere, co-president of the CIVC and head of UMC, a grouping of major champagne houses, said by telephone.

“But for us it was the best decision to help the cashflow of the vineyards and to protect the champagne brand internationally.”

The champagne sector has been flattened this year by lockdown measures to curb the pandemic, with sales drying up as hotels, restaurants and bars closed, and hospitality events were cancelled.

CIVC has estimated that as many as 100 million bottles will go unsold this year, representing lost turnover of 1.7 billion euros ($2 billion).

Harvesting of champagne grapes officially got under way on Monday after some initial cuttings last week, marking the earliest start on record, the CIVC said.

Reporting by Gus Trompiz; Editing by David Goodman and Mark Potter