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 might be because there’s not much joy in the world right now.
“Champagne is quite linked with celebration, happiness, et cetera,” CFO Jean-Jacques Guiony said on Tuesday’s earnings call, per Business Insider.
“Maybe the current global situation, be it geopolitical or macroeconomic, does not lead people to cheer up and to open bottles of Champagne. I don’t really know.”
In other words, because people aren’t so inclined to pop open a bottle of bubbly 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 — though still and sparkling wine sales 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 revenue for both Champagne and wines during the first half of 2024, which is a 12% decline from 2023.
According to Guiony, the Champagne industry hasn’t seen great demand in general — especially in Europe.
That is partly due to weather conditions there, such as frosts and wet weather that “increased mildew fungus attacks,” which have affected the production of the most important ingredient in Champagne: grapes, Reuters reported.
However, “the existence of economic cycles courtesy of Central Bank’s accommodative policies” might lead to a better outcome for wines in the coming months, Guiony suggested.
However, it doesn’t seem like LVMH will be popping bottles for themselves anytime soon.
The luxury giant — which also owns Louis Vuitton, Dior and Tiffany — has seen its shares drop in general with analysts seeing decreased demand for fashion, watches, leather goods, perfumes and cosmetics.
