Has champagne lost its sparkle?

The once exclusive French fizz has become the smoked salmon of our times, losing its cachet as it goes mass market

Bollinger, the preferred fizz of Queen Victoria, Evelyn Waugh and the Bullingdon Club, has been on sale at £17.85, half-price, in downmarket Morrisons supermarkets. Less posh champagne is £10 a bottle in Tesco, Asda and Lidl, and premier crus and big names can be had for £5 more.

In France this month, champagne costs as little as €7 a bottle. The former Wine of Kings has been vulgar for as long as people have flashed their money around. But now it is plain cheap.

This is a story of more than the supermarkets' usual festive price wars. In the cold, chalky hills of northern France, where champagne has been made for more than 300 years, they are calling it a crisis; the worst price slump to hit the industry in half a century.

Champagne shipments to Britain, the biggest market outside France, were down over 30 per cent on the year by September and much more in the United States. Even in China — the seat of all the hopes of Rheims and Épernay's avaricious vignerons — the massive sales increases of recent years have slowed.

Most analysts agree that grand old champagne houses brought this disaster on themselves. They cashed in on the supposed champagne drought of 2007, raising prices outrageously while quality slipped. Shipments to the biggest overseas markets showed double-digit drops in 2008, but the winemakers shilly-shallied over reducing volumes: the houses had arrogantly decided, as one eminent vigneron told the wine writer Michael Edwards, that champagne was “recession-proof”. The result is an historic glut: reportedly there are now 1.2 billion bottles, equivalent to four years of sales, languishing in French caves and warehouses.

Edwards has watched the ups and downs of champagne both as a wine trader and as the chief inspector of the Egon Ronay guide. He says that he expects the industry to recover, slowly, though he believes the price cuts could be dangerous for it. “It's very damaging to the image of any brand when the consumer is asking why what now costs £18 was ever sold at £50.”

Marlous Kuiper, head of alcoholic drinks research at the analysts Euromonitor, agrees: “We've seen other drinks such as whisky suffer in the long term after selling themselves cheap in the supermarkets. It's very hard for brands to get back.”

In America, champagne's biggest overseas market after Britain, this year has been catastrophic. The Wall Street Journal in September charted its collapse even in “cork-popping stalwarts like strip clubs and hip-hop joints”; one of the US's biggest distributors reporting sales of top brands down by 85 per cent, and ordinary ones by 50 per cent. As a result, prices were being slashed.

Margareth Henríquez, of Louis Vuitton Moët Hennessy, the luxury goods house that sells 50 million bottles of impeccably branded champagne every year, tried to pass off the fire-sale marketing as strategically clever. “In times like these we can get into accounts that we couldn't get into before.” But in Manhattan that has meant impossibly grand champagne labels such as Dom Perignon and Krug turning up, massively discounted, in Manhattan oyster bars and even smart burger joints.

These were extraordinary — some might say desperate — moves from an industry that used to be famous for trying to keep its skirts above the mud of modern marketing. There is a trade legend that when, in the 1970s, Moët et Chandon realised that its magnums were being used as liquid fireworks on the podium at Formula One medal presentations, it asked the motor-racing industry to desist from such disrespectful treatment.

But then, of course, the grand old house of Roederer found that it could sell Cristal, a brand designed for the Russian tsars, to gangsta rappers and footballers' wives at £300 a bottle. “Vin Bling” was born. Now Moët et Chandon, once drunk by Napoleon Bonaparte, is product-placed in endless Hollywood rom-coms. Bollinger, whose president once insisted that his champagne was never “linked to supermodels”, is known for tacky Bond movie cross-promotions and goes on special offer at Britain's least glamorous supermarket chain for less than the price of three packs of fags. (To my deep regret, Morrisons has now sold all its cheap Bollinger, and put the price back up. But if you want an oldfashioned bling Christmas you can now get Cristal's 2002 vintage, gift-wrapped, for less than £150.)

Is champagne in fact the smoked salmon of our times, a delicacy once rare that has lost all cachet by becoming ubiquitous? Didn't it taste better when it was a special treat? Certainly there are questions over the quality of the cheap champagnes. The Times's wine writer Jane MacQuitty wrote recently that most of the 2009 cut-price champagnes were “truly terrible”.

“None of you should be seduced into parting with good money for such dross,” she said. “Just because a wine is dirt-cheap does not mean that it's a bargain.” Sounds just like smoked salmon.

Champagne's longer-term problem, of course, is that there are very good alternatives to it, as even a lifelong fan of the wine such as Edwards will concede. I asked the manager of my local Oddbins — which this week has 30 per cent to 40 per cent discounts on big-name champagnes — what he could offer to counter the £10 Tesco bottle. He convinced me to buy a bottle of Jansz, from Tasmania, “traditionally made in the champagne style, in a similar climate, aged for three years”. It went down very well at dinner: as you might guess, nobody raised an eyebrow when I told them that it was a vintage champagne.

Sparkling wine drinkers have long known that you can get twice the quality for half the money, if you venture south of Champagne — even if that means ending up at Smelly Creek Vineyards, New South Wales. Since the 1980s, after Californian wines started beating French in blind tastings, grand champagne houses such as Mumm and Roederer have had outposts in the Napa Valley, producing impressive sparkling wine at good prices.

British sparkling wine, grown on land very similar to that of Champagne, is also growing fast (I have to declare an interest here, since my parents farm pinot noir grapes on the Sussex Downs for the award-winning Ridgeview label). But the British brands sell at more than £20.

Richard Ingleby is an ex-champagne buyer. He co-owns a contemporary art gallery in Edinburgh, which shows the likes of this year's Turner Prize winner, Richard Wright. The gallery has to throw a bubbly-fuelled private view ten or more times a year. But Ingleby no longer buys champagne. “Now we serve prosecco [a light sparkling wine from northern Italy, retailing at less than £10], which is perfectly nice. We don't try to pass it off — people are offered a glass of prosecco and they like it. Personally, I may buy a champagne such as Veuve Clicquot at Christmas because it is part of the tradition. But not because I prefer it.”

There are silver linings to champagne's crisis, says Michael Edwards. The discomfort of the grand old names will enable smaller growers offering good value and new thinking to come forward. And, clearly, the consumer is a winner: “I think this is a healthy corrective,” Edwards says. “And a recession always means that the wine improves in quality because it stays longer in the cellar.” What will be interesting is to see whether the French industry goes ahead with its plans to reorganise and expand the physical area defined as Champagne, increasing production by perhaps another 15 per cent.

Will champagne restore its image? “Champagne is going to have to learn to market and sell itself again, and better,” says Marlous Kuiper. “They will have to compete with the cavas and the proseccos." Her organisation sees little hope of champagne restoring its market until 2012 at least — she says that in most emerging markets sales “have fallen off a cliff”.

Although champagne is historically cheap, it is sparkling wines that are enjoying the impressive sales increases — up 70 per cent at Sainsbury's.

The answer to champagne's woes might lie in restoring it as a drink for all times, not just celebrations. Certainly 100 years ago people would drink champagne through the whole of a meal. Edwards, who has just published a new guide to Champagne and its growers (Aurum Press), is a fan of the wine during dinner. “It's marvellous with French cheeses such as Époisse, Brie and Camembert. And you could try a demi-sec with the Christmas Stilton.”

Lily Bollinger, the matriarch who guided the great champagne house through much of the 20th century, had a famous prescription for appropriate occasions on which to consume it. “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.”

If you want to take her at her word, a cheaper Bollinger is very good news.

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