Champagne business hopes for happier 2002

From Lisa Leiter
CNN Financial News

CHICAGO, Illinois (CNN) -- It's the drink that defines celebration. But with fewer people feeling festive, the champagne business has been anything but bubbly this holiday season, which accounts for about a third of annual champagne sales.

"The market conditions generally are fairly difficult because of the difficult economic situation that we have, because of the uncertainty that the attacks on September 11 have created," said Jean-Louis Carbonnier, a wine consultant with Carbonnier Communications.

The champagne slowdown started well before September 11. Shipments were down 40 percent in 2001, partly because of weaker demand but also because so many importers overstocked for millennium celebrations.

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Rising unemployment and falling stock prices have especially hurt sales of the high-end vintages.

"The top of the market, the prestigious cuvee, the very high-priced bottles of champagne, have shown a decrease, and that is mostly because many corporations are cutting down on their corporate gifts," said Mireille Guiliano, president and CEO of champagne producer Veuve Clicquot.

"Businesses were changing, people were focusing more on value-type products, and so I think 2001 was a challenging year," said William Terlato of Illinois-based Paterno Imports.

Importers such as Paterno have faced a challenge because hotels and restaurants are not stocking their cellars. People also are not eating out as much, and when they do, they're spending less.

One Chicago restaurant, Spiaggia on North Michigan Avenue, cut the price of its New Year's dinner from $250 to $195.

"Everyone is a little more cautious and looking to get value," said Christine Tully, the restaurant's general manager.

Sam's Wines and Spirits in Chicago, a large liquor retailer, said it would usually be sold out of one popular $120 cabernet. But a few bottles remained.

Sam's sold a lot of low- and mid-priced wines to people who thought they did have something to celebrate and those who felt guilty about splurging.