Definitive study of Champagne’s expansion plans

Tom takes an in-depth look at the planned expasion of the Champagne region, exploring the issues, motives, movers and shakers behind the plans. This report first appeared in Wine & Spirit magazine. Our thanks to them for allowing us to reproduce it here.

I have six billion euros. Who will give me twelve?

“Everyone knows that Champagne could easily be expandedby as much as 10,000 hectares,” says Pierre-EmmanuelTaittinger. Everybody, that is, except me. I figured theremight be between 1,200 and 5,000ha of land suitable forgood quality Champagne production in the proposed40 “new” villages. Admittedly, my figures are aguesstimate, but they were not plucked out of thin air. I looked at thecurrent usage in the villages immediately adjacent to the proposed newones and extrapolated. 5,000ha would create €6 billion in newwealth because the most suitable land for viticulture is the least suitablefor any other form of agriculture, and the cheapest farmland inthe region ranges from €1,800 in the Haute-Marne to €4,000 in theMarne. On the other hand, the most recent sale of modest, not grandcru, AOC Champagne land was in Bethon, which went for €1.2 millionper ha. But if Taittinger is right, the potential for new wealth is €12 billion,not €6 billion.

Bring on the chorus girls

sgv (3K)The houses are all singing from the same hymn sheet, and if there isone chorus I have heard more than any other, it is that the growers ingeneral, the Syndicat General des Vignerons (SGV) in particular, are pushing for this expansion. It’s true, in theory at least. The requestfor an expansion was made formally by the SGV to INAO following avote at the SGV’s general meeting on April 9 2003, when the motion wascarried by 393 votes to 25.

To be polite, I find this perplexing. Are we to believe that the growersactually want to open up their monopoly to new owners and allow inalmost one-third more grapes, which can only soften prices and reducetheir income? Whatever the documented evidence, the biggest brandshave the most to gain and I have been told off the record that it is theirhand behind this expansion. I could understand if the leaders of theSGV came to some sort of an arrangement with the upper echelonsof the Union des Maisons de Champagne (UMC) for the good of theindustry, but this request was not agreed in a smoke-filled room behind closed doors. It was achieved by a democratic vote, which was conclusive;although growers who responded to my questions pointed out,not unreasonably, that the 393 affirmative votes by no means representthe majority opinion among the SGV’s 15,000-plus membership. Thesubplot is that, because the growers have nothing to gain, it would lookgood for them to be seen to be initiating this expansion; but how theygot the SGV to play ball is subject to a lot of conspiracy theories.

I cannot quote the most extreme comments or accusations because,without proof, they would be actionable; but it would be fair to say thatsome growers are more than a little suspicious of the motives of certainindividuals involved in pushing the SGV motion through. To paraphraseone of the more printable comments made to me by six growers and onesmall house: “We assume that most of those who attended the assemblywere in favour of the motion to expand, which is why they went there.But as in all elections, people who complain seldom vote to defendthemselves.” On the other hand, this demonstrates that the growers whofear their franchise has been broken have only themselves to blame.Quantitative expansion or qualitative revision?

xFrédéric Cumenal, the président directeur général (PDG) of Moët& Chandon, told me: “The revision of the appellation is a fantasticopportunity to push further quality standards. We entirely support theidea of evaluating together a possible revision of the Champagne appellation.We fully trust INAO’s wisdom, and we will support the institution’sdecision. We know they will select the criteria that will permitChampagne region to achieve its full potential.”Few spokesmen for the houses were willing to stray further fromthis party line. There is a sense of complacency about INAO’s qualitycriteria, but few suggested the application of such criteria must becompletely transparent. One exception was Michel Letter, the PDG ofMumm and Perrier-Jouët (left), who demanded “no quantitative expansionwithout a qualitative revision”.

He made this statement without anyprompting, and if Champagne should take note of anyone inside itsown industry it should be Letter, who (with Mumm’s former PDG, Jean-Marie Barillère) knows how easy it is to lose a reputation and howdifficult it is to regain.

The only way to ensure “no quantitative expansion without a qualitativerevision” is to re-evaluate all the existing villages, not just the proposednew ones. Following the demise of the échelle des crus as a glorifiedprice list, Champagne should dump its Beaujolais-like village-byvillagecru system and re-evaluate all vineyards on a plot-by-plot basisif their classification is to command any respect. Take Avize or Cramant,for example: this would entail reducing the status of some vineyards topremier cru, while those on the wrong side of the D9 would becomesimple village cru wines. On the other hand, there are a few places, suchas Mareuil-sur-Aÿ, where a proportion of vineyards should be classifiedgrand cru, while hardly any of its vineyards deserve less than premiercru status. And there will be some villages where less exalted sites willhave to drop out of the appellation altogether. So, not only must therebe full transparency about why new vineyard areas have been selected,there must also be a radical reassessment of Champagne’s cru status,and a trimming of the most inferior existing areas, if this expansion isto be credible.

This would not be the back-breaking, time-consuming task it sounds,since the data necessary is already available, having been accumulatedduring the five-year Zonage project in the 1990s. Zonage examined theentire AOC Champagne region plus almost 20,000ha of immediatelysurrounding areas by dividing it into more than 200,000 50m x 50mparcels, which were then subjected to the most intensive explorationof terroir ever conducted. It meticulously evaluated each parcel – fromunder the ground, above the ground and from space – by every meansof analysis available at the time, from digging holes to satellite imagery.

Where there’s a will

cp (15K)So the means exists, but does the will? I was discussing this subject withCharles Philipponnat, the PDG of Champagne Philipponnat, who wasvery keen on such a revision even before the proposed expansion, yetvery dubious about it ever taking place. “From a quality point of view,”he said, “we trust INAO experts will qualify parcels just as good as, orbetter even than, those in the neighbouring villages. To be realistic, weexpect little grand or premier cru land to be created, but the new areasshould easily be capable of producing decent non-vintage material.”However, if we classify new land, this implies that we should reevaluateexisting land and, perhaps, declassify some areas in the process.I very much doubt that this will happen, which is a pity. Also, I thinkthe status of grand or premier cru, as well as simple village cru, shouldapply to parcels, not whole villages; but as far as I know this has not beencontemplated in the revision process.”

As it happens, a few days earlier I had a phone call from the PDG ofa family-owned house of impeccable reputation, and he told me that hehad only just heard the week before that the experts were indeed contemplatingdeclassifying some land in current villages. He preferred notto be named, but felt I should know. What about compensation, I asked,and he told me there was talk of a compensation scheme similar to theone used for the 25ha of AOC Champagne that had to be destroyed forthe TGV line. When I passed this on to Philipponnat, he responded: “Ifthis idea is making its way into the minds of our experts and leaders,then it is great news, as it will make the whole process credible.” So,maybe there is the will…

The credibility gap

Credibility is something that Champagne desperately needs atthe moment. Requesting such a massive expansion when sales ofChampagne are at record levels, demand is outstripping supply andalmost every spare hectare of AOC land has been exhausted was boundto attract an adverse reaction. Is it any wonder that the internationalpress (and not just the wine press) think it is nothing more than greed?Internet forums are practically foaming at the mouth in disgust, andChampagne should take heed because they are the preserve of die-hardwine consumers. With everyone in Champagne toeing the party line,the question of whether to expand appears not even open to debatewithin the industry itself, and that comes across as arrogance, merelyfuelling the accusations of greed.

However, I honestly believe that Champagne is not guilty of greed.Just stupidity. The expansion proposals have – so far – been intelligentlydrawn up to enhance both the quality and efficiency of Champagnewithin its historical borders. It’s just that the timing sucks. And becauseof that, there is a credibility gap that Champagne must bridge if its”strictly delimited” image is to be taken seriously in the future. The onlyway to achieve that is not only to ensure that every hectare of newly classifiedAOC land is superior to the average quality of Champagne’s currentvineyards (which makes an infallible argument for expansion), butalso to provide complete transparency of the quality criteria involvedand how those yardsticks have been applied by the experts.

What goes around comes around

The possibility of expanding Champagne is not a new topic. In a recentinterview, Frédéric Rouzaud, the PDG of Champagne Louis Roederer,spoke about a similar project mooted in the late 1980s. Rouzaudclaimed: “The crisis of 1990 (when higher prices led to a slowdownin sales) put an end to this,” yet that was precisely the right strategicmoment to contemplate an expansion. With sales plummeting, cellarsbulging with stock, and 4,000ha of AOC Champagne yet to be planted, Champagne could not have been accused of cynically milkingan expanding market. Furthermore, if it had gone ahead, the new areasplanted would be coming on stream now, just as Champagne needs itand without the slightest recrimination.

None of us would have even noticed. Other expansions and, indeed,other contractions have come and gone – not just in Champagne, butin every wine region of France – without raising so much as an eyebrow.It is merely the timing of this expansion that has red-flagged it for all tosee. A good illustration in Champagne is Fontaine-sur-Aÿ, which wasadded in 1990 without any hullabaloo, and quite rightly too, as it boastssome of the best slopes between Avenay Val d’Or and Louvois. Villagessuch as Fontaine-sur-Aÿ were not delimited between 1908 and 1927simply because their mayors did not bother to apply for inclusion inAOC Champagne. This was mostly because the landowners were aristocratswith no interest in commerce, or the villages in question had beendevastated by phylloxera and switched to growing other crops.

Champagne’s AOC boundary is not carved in stoneHistorically, the province of Champagne covered 2.5 million ha.According to Cyrus Redding in A History and Description of ModernWines, the Aube alone had 22,586ha of vines in 1833. There were inexcess of 60,000ha of vineyards at the end of the 19th century (duringChampagne’s so-called “golden years”). The appellation law of 1927(which grew out of the delimitations of 1908 and 1919, and the lawsuitof 1911) recognised 46,000ha in 407 villages. In 1951, following a slumpin the market, Champagne requested a contraction in the delimitedarea, and INAO reduced the AOC to 34,000ha in 302 villages. And therewere 34,500ha in 311 villages when I started researching Champagne in1980. Today, there are 35,200ha in 319 villages, of which just over 34,000can be planted (the balance being tracks, bridges, cuts and other inaccessibleareas), and 33,542ha are in fact planted.

The AOC law specifies three zones: Zone de l’élaboration; Zone de Production; and Zone Parcellaire de Production de Raisins. The Zone de l’élaboration is outer limits of the region, currently comprising 647 communes covering in excess of 600,000 ha. It is only in this zone that it’s legal to vinify and transport Champagne grapes and wines. Within the Zone de l’élaboration is the Zone de Production, an inner area currently consisting of 319 communes covering approximately 300,000 ha. Within these communes there are 35,200ha where AOC vineyards may be planted. champagne-before (29K)


Expansion so far

As Frédéric Rouzaud said recently: “No mentions of increases or decreases are being made at this point,” and theoretically he is correct. Theoretically, INAO’s experts could do a 1951 and reduce the appellation, but realistically there is a fat chance of that happening. There have been both increases and decreases at village level, and ideally there will be increases and decreases at vineyard level; but Rouzaud is right about one thing: we have to wait. The chronology up to now and 12 years into the future looks like this:

2003 On April 9, the SGV requested revision of AOC Champagne; INAO formed a committee of experts in five disciplines (history, geography, geology, phytosociology and agronomy), which included only one Champenois (CIVC technical expert);

2004-2007 Experts examined two zones of Champagne (Zone de l’élaboration and Zone de Production) at village level;

2007 On June 26, INAO’s experts drew up confidential maps and presented a preview of the proposed changes to the CIVC at a secret meeting in Epernay; On October 10, Sophie Claeys-Pergament of L’Union broke the story of the proposed 40 “new” and two “excluded” villages; As a stopgap measure, for a five-year trial period (that will, no doubt, last and last) to increase production immediately, the maximum yield was raised from 13,000kg to 15,500kg per ha;

2008 On March 14, INAO issued its first avis (opinion) accepting the experts’ preliminary findings; The proposals go before a year-long public inquiry, which might add (likely) or remove (unlikely) villages to either the Zone de l’élaboration or Zone de Production;

2009 Early in the year, INAO will make its second and final avis at village level on the (probably enlarged) findings of the public inquiry. As this does not have any direct influence on the experts’ next task of identifying potential vineyard areas on a plot-by-plot basis, and a rejection could invite long and serious legal action from any “additional” villages tacked on by the public inquiry, the likelihood is that INAO will accept the verdict in full; The secretary of state for agriculture will sign a law authorising new boundaries for the Zone de l’élaboration and Zone de Production;

2009-2014 It will take at least five years for INAO’s experts to examine in detail all 40 (or more?) “new” villages to decide which plots might be suitable for vineyards;

2015 INAO will issue its first avis (opinion) accepting in part or all the experts’ proposals at vineyard level; These proposals go before another year-long public inquiry, which is likely to be even more of a bun fight than the first one because the land on the right side of the experts’ divide will increase in value overnight from as little as €1,800 to as much as €1.2 million per hectare, whereas the land on the other side will not;

2016 Early in the year, INAO will makes its second and final avis at vineyard level; The secretary of state for agriculture will sign a law authorising new boundaries for the Zone Parcellaire de Production de Raisins (AOC Champagne vineyards);

2017 The CIVC will authorise the first new areas to be planted;

2019 The first new vines achieve third leaf and can be harvested;

2021 It will not be until the middle of this year that the very first wines could possibly hit the shelf, the earliest disgorgement date being March 31, and even the most penny-pinching producers would allow the wine three months ageing prior to shipment. But even this final far-flung date is subject to there being no delay in the schedule; and with two public inquiries in the offing, who would bet on that?

Village verdict

After all the cynicism and reality checks, readers might be surprised that I’m more than a little happy with the village level expansion, but I have to call it as I see it. The worthiness or otherwise of the new vineyards ultimately decides the fate of this expansion, but it can already be seen that the experts have done an excellent job so far. Even someone without any knowledge of the region and its terrain should be able to sense the neat way in which the Zone de l’élaboration envelops the Zone de Production, just one commune deep in most parts, easing the necessary movements between vineyards, press houses, wineries and warehouses. It was impossible to continue the logic of a one-commune envelope along the very southern border of the Aube district because that would have encroached upon the Côte d’Or département, and Burgundy would never have allowed that. There is only one further improvement the experts could have made, as far as I can see, and that would be to encompass a narrow corridor along the main motor routes linking each of the three separated districts. Perhaps it is a bit too radical for a traditional institution like INAO to contemplate, because it would be purely for transport, not elaboration, and I would include a clause in the law reserving the right to adapt these corridors should new roads be built. As for Zone de Production, I am reasonably happy with the 40 “new” villages, which do not so much expand the AOC outwards as consolidate it inwards, filling gaps between or adjacent to existing villages, where an impartial expert might reasonably expect vineyards should exist.

Even those villages that fall outside the current Zone de l’élaboration are, in fact, within the potential of the 1927 law. As for the two “excluded” villages, Germaine and Orbais l’Abbaye, I am less convinced. Although neither village has demonstrated much in terms of quality over the years, and thus their exclusion is welcome, they look too much like sacrificial lambs to me. Is it coincidence that only two producers are involved, and that they happen to be two of the largest houses in Champagne with the most to gain from an expansion? On their own, such tokens are not worth the effort, but as part of a larger exclusion that included lesser-quality land within the current 319 villages, and a plot-by-plot classification of grand and premier crus, they would really help Champagne bridge the credibility gap. When the public inquiry has made its deliberations, the experts will face their toughest test, but they should be in no doubt about what they have to deliver. If all the new land they propose can be demonstrated to have a potential quality in excess of the average quality of the current AOC vineyards, then they will have produced an infallible case for expansion, because not to proceed would be to condemn the future of Champagne to an unnecessarily inferior quality