There’s no sign of the cost of living crisis at Spencer House, an 18th-century aristocratic palace, overlooking Green Park in Mayfair, London, which has this week been temporarily renamed Bollinger House to celebrate the launch next week of a £350-a-bottle champagne.
The launch, which was celebrated with a seemingly endless supply of the new Bollinger RD 2008 and a black-tie banquet for more than 100 people, is the latest in a series of expensive vintage champagnes capitalising on booming demand as wealthy people continue to party hard to make up for lost extravagances during the pandemic.
Champagne shipments hit a record €6bn (£5.3bn) last year, according to the Comité Champagne, the trade association of producers in northern France, which expects sales to be even stronger in 2023.
Charles Goemaere, Comité Champagne’s general manager, said producers had been slightly caught off guard by the strength of demand after the return to normality after the coronavirus crisis.
“It was a surprise after the pandemic to see such a rebound in most of the markets,” Goemaere said. “We don’t have a precise view of psychological reasons, but consumer studies show champagne is the drink of celebration, and people very much want to celebrate even small things after such a horrible period.”
Goemaere said rich people – whose disposable income has been largely unaffected by soaring inflation – were particularly seeking out specific vintages and more valuable bottles. “The rebound was particularly unexpected on some bottles, and some producers may have faced difficulties.”
LVMH, the luxury goods company behind Moët & Chandon, Veuve Clicquot, Krug and Dom Pérignon said in November that it was “running out of stock on our best champagnes” as wealthy people were, it said, enjoying a new “roaring 20s” age of decadence.
Goemaere said talk of a champagne drought had been greatly exaggerated and sought to reassure lovers of the fizz that more than 1.2bn bottles were stored in the region’s champagne caves and cellars.
The number of bottles shipped in 2022 increased by 1.6% to 326m, but prices were much higher leading to a 10% increase in value of total shipments. In 2020 – at the height of the pandemic – just 245m bottles were shipped.
Matthew O’Connell, chief executive of fine wine trading platform LiveTrade, said the average prices for top champagnes (including Bollinger, Cristal, Krug, Dom Perignon) increased by 23% last year on top of a 42% increase in 2021.
He said the price increase had been led by an “ongoing luxury consumer explosion” and a growing number of very wealthy people. “Yes, the cost of living crisis and inflation affects most people, but the ultra high net worth people we are selling to are very insulated. They might have lost money on equities [shares] in the last six months, but their spending power certainly hasn’t decreased.”
Tom Gearing, co-founder and chief executive of investment firm Cult Wine Investment, said average champagne prices in his company’s index had risen by 52% over the past three years. However, he said he expected the price rise to slowdown as farmers push to increase yields.
Asked why he thought champagne prices have risen during the cost of living crisis, Gearing said: “It doesn’t affect the richest people. Luxury goods are doing better than ever during a cost of living crisis – I’d arguably say luxury is doing better than it ever has done.”
Gearing, who pitched his wine investment business to Lord Sugar in The Apprentice in 2012, said the fine wine market is made up of “only a few thousand people” who have “huge buying power and push up prices by competing against each other”.
“The cost of living crisis has really shown us the scale of wealth inequality,” he said. “It doesn’t affect the richest people. Luxury goods are doing better than ever”.
Charles-Armand de Belenet, managing director of Bollinger Champagne, told the gathering of sommeliers, wine critics and merchants, that the new Bollinger RD 2008 was one of its best ever wines.
De Belenet said the wine was the embodiment of former owner Madame Lily “Jacques” Bollinger, who took over from her husband who died in 1941 during the Nazi occupation. “[She] always made it her mission to preserve the exceptional flavour and quality of her wines, which are the result of generations of experience and constant innovation.”
He reminded the crowd that Madame Bollinger, who died in 1977 and was succeeded as owner by her nephews, famously told the Daily Mail in 1961: “I drink champagne when I’m happy and when I’m sad. Sometimes I drink it when I’m alone. When I have company I consider it obligatory. I trifle with it if I’m not hungry and drink it when I am. Otherwise, I never touch it―unless I’m thirsty.”
