In an unprecedented move Moët and Chandon has announced it will be paying 4% more for its grapes this year compared with last.
This is in a move to secure supplies as it seeks to increase production as its new facility at Mont Aigu in Oiry opens for business.
‘The leaders of the different houses in the LVMH group – Moët, Veuve Cliquot, Ruinart, Krug and Mercier, have a mandate to pay 4% more than they paid last year, to secure their supplies,’ said CEO Stephane Baschiera.
Speaking just before this month’s meeting of Champagne trade body the CIVC, at which the yields for 2012 are determined, Baschiera called for yields to be set ‘between 11,000 and 12,000kgs/ha and not less than 11,000kgs/ha.’
Moët is looking to increase its production and wants to do this by purchasing more grapes, not by buying vins clairs or wine produced for it under contract by other producers.
Mont Aigu considerably increases Moet’s production and needs supplies in a harvest that is generally predicted to be down 30% in volume.
While Moet has been a much more aggresive buyer in the market in recent years, it is usually more discreet and certainly does not announce publicly what it intends to offer.
As the largest purchaser of grapes in the appellation, what Moet pays becomes the standard price. Some say forcing prices up is clearly a ploy to make things difficult for producers who find it hard to pay more for their grapes and still remain profitable.
‘This is part of LVMH’s new strategy, ’ said Laurent Gillet, president of the Union Aubois co-operative.
‘They are demonstrating their power. As the leading player in Champagne, which effectively sets the price, they can do this. It is is true that certain competitors are a bit upset about that [pushing the grape price upwards]. But they are confirming their ambition to grow.’
Some see Moët’s action as beneficial for Champagne. ‘They are acting as a strong leader should and demonstrating LVMH’s commitment to Champagne, and that’s good for everyone,’ Michel Drappier of Champagne Drappier said. ‘Their ambition to grow is no secret and to do this they need more supplies.’
In some places hit by frost, hail and disease, the average may be as low as 8,000kgs/ha while some in the Côte des Bar will pick nothing and some will decide it is not worth paying growers to pick the meagre amount available.
Written by Giles Fallowfield
