Champagne sales fall due to lack of ‘celebration’ and joy in the world, industry executives say

Talk about champagne problems.

Luxury goods company LVMH is seeing a drop in revenue for champagne sales in 2024 – and the brand’s chief financial officer thinks it could be because there isn’t much joy in the world right now.

“Champagne is quite associated with celebration, happiness, etc,” CFO Jean-Jacques Guiony told Business Insider on Tuesday’s earnings call.

“Perhaps the current global situation, whether geopolitical or macroeconomic, does not prompt people to cheer and open bottles of champagne. I don’t really know.”

In other words, because people aren’t so inclined to open a bottle of bubbles with the state of the world, the industry is feeling it.

The company sold 15% fewer bottles of champagne in the first half of 2024 compared to the same period last year – although sales of still and sparkling wines were up 16%.

LVMH, whose brands include Dom Pérignon, Krug, Ruinart, Veuve Clicquot and Mercier, generated 1.4 billion euros — about $1.5 billion — in champagne and wine revenue during the first half of 2024, down 12% from the year 2023.

According to Guiony, the champagne industry has not seen great demand in general – especially in Europe.

That’s partly due to weather conditions there, such as frost and wet weather that “increased mold attacks,” which have affected the production of the most important ingredient in champagne: grapes, Reuters reported.

However, “the existence of economic cycles underpinning accommodative Central Bank policies” could lead to a better outcome for wines in the coming months, Guiony suggested.

However, it doesn’t look like LVMH will be releasing bottles of its own anytime soon.

The luxury giant – which also owns Louis Vuitton, Dior and Tiffany – has seen its shares fall across the board with analysts seeing lower demand for fashion, watches, leather goods, perfumes and cosmetics.