Sales of Champagne have dropped among the French amid Brexit uncertainty and a trade scuffle between the Washington and Paris. Despite rising sales abroad, a decade long slide in domestic demand has continued, with sales falling by 6.5 million bottles in 2018. This year the situation appears to be following the same scenario.
"In a difficult economic and geopolitical context, the uncertainties linked in particular to Brexit and the French market remain, and still call for much caution", said producer Laurent-Perrier adding that its sales fell 0.6 percent this year.
Besides tensions with the United States and exhausting negotiations with Britain, two top export markets, this year the situation was exacerbated by a transport workers’ strike that continued into the Christmas season. To top it off, cheaper foreign-made alternatives have gained popularity among the French. Volumes of French Champagne sold in supermarkets fell 3.5 percent in 2018, while Spanish Cava and Italian Prosecco jumped 58 percent.
US President Donald Trump threatened to impose 100 percent tariffs on Champagne in response to Paris’s decision to impose a digital tax that would affect American giants like Facebook and Google. Etienne Calsac, an independent producer, said he could adapt to other markets, but for the whole sector US tariffs would be catastrophic. Earlier this month, the Office of United States Trade Representative said that $2.4 billion worth of French products could be hit with a 100 percent tariff.
Commenting on the French digital tax, President Trump said he is “not in love” with tech giants like Facebook, but stressed he wouldn’t let anyone take advantage of US companies. Paris promised to retaliate, if Washington goes on with tariffs.