I love Champagne, but I hate the Champagne industry. So this Wall Street Journal story about a cut in production made me happy -- even though the move is a weird combination of top-down class structure and communism.
Here's the problem with Champagne's establishment -- it's basically run by LVMH, which owns Moet & Chandon, Veuve Clicquot, Dom Perignon, Krug, Ruinart and Mercier.
In 2006 LVMH owned 62% (by volume) of the Champagne sold in the US. Globally, LVMH hasn't been as powerful, with just an 18.6% share. But in Champagne, decisions tend to be made based on what LVMH wants.
For years, what LVMH and its fellow big producers wanted was more, cheaper grapes. Champagne is a place, not just a wine, and the amount of Champagne wine that could be made was therefore limited by the agricultural output, even though yields there are enormous by the standards of luxury wines.
So if you have to use grapes from one area, and farmers are already growing as many as they can, what can you do? The answer: Grow the area. And that's just what Champagne did. Last year, Champagne's governing body added 40 new grapegrowing areas in outlying areas, with 2,500 acres of vineyards, to the existing 84,000 acres of vineyards.
Publicly, the idea was to satisfy increasing demand, particularly from China and Russia. But there's always a subtext, and that is that big brand owners can better control grape prices with more new farmers to deal with. They can put the same label on, and charge the same price for, a product that's cheaper to make.
Now, though, in the global downturn, people aren't drinking as much Champagne. That's a shame; as I said, I hate the industry, but love the wine (this is not the place for me to wax on about the soils and acidity, etc., but good Champagne really is special). It's a lot like baseball: I hate Bud Selig and disagree with almost every major MLB decision, but that doesn't stop me from enjoying watching Tim Lincecum pitch and The Panda hit.
So LVMH -- excuse me, the Comité Interprofessionnel du Vin de Champagne (CIVC), the governing body that does what the big brands want -- has announced that Champagne growers must cut harvest by 32%, leaving the rest on the ground.
Think about this for a second. Did the CIVC say, everyone can harvest and the best grapegrowers can get the best prices? No. That would be capitalism. Or more appropriately, that would be Liberty, and possibly Fraternity.
This is why I say it's a combination of top-down class structure (brand owners telling tenant farmers what to do) and communism (everybody is the same; viva la Revolucion!).
What I really hate about this is that the CIVC is not encouraging growers to take the grapes that the big brands refuse to buy, at prices the big brands set, and make their own grower Champagne. Apparently, they simply cannot harvest them at all.
All of which reinforces why I hate the Champagne industry. And yet, even though I know LVMH is a cold-blooded corporation, open a bottle of Krug or Ruinart for me and I'm all atwitter with delight. Schadenfreude tastes good, but dammit, Champagne, even corporate Champagne, tastes better. (Can't say that for Bud Selig.)