Champagne Shortage Likely to Push Up Prices of Bubbly Over Holidays

An employee conducts quality control at the French champagne house Bollinger, in Ay, near Epernay, France, on Dec. 2, 2020. Bertrand Guay/AFP via Getty Images

With New Year’s Eve a little over a week away, experts say revelers should brace for higher prices of champagne and difficulty finding the most popular brands amid a global shortage of bubbly.

The COVID-19 pandemic has impacted supply chains in various ways, with champagne being the latest casualty.

“There actually is a shortage of champagne, it’s kind of crazy,” said Ray Isle, Food & Wine Magazine executive wine editor, in a Dec. 23 interview on CNBC’s “Squawk Box.”

Isle said the shortage isn’t so bad that people won’t be able to find sparkling wine, but that the most popular brands of champagne will be hard to source and that, in general, people should expect to pay more.

“You may see prices rise for champagne,” he said. “Where you are seeing shortages are in the big names of the most popular brands,” he said, adding that champagne hunters should be “a little adaptable” this season.

Anticipating a pandemic-driven drop in demand, the Comité Interprofessionnel du Vin de Champagne (CIVC), the trade organization for France’s Champagne region that sets production limits every year, imposed a cap for 2020 that was around 25 percent lower than that for 2019, according to Beverage Industry Enthusiast.

But demand for bubbly picked up above expectations towards the end of last year, a trend that has continued into 2021, industry experts say.

Natalie Pavlatos, a spokeswoman for the Champagne Bureau, USA, told CNBC in October that champagne sales in 2021 appear on pace to exceed pre-pandemic levels.

“We may actually be seeing not only a return to normal but even better performance than we had in 2019,” Pavlatos told the outlet.

Alongside climbing demand for bubbly in 2021, the Champagne region was hit with unusually bad weather, destroying vines and squeezing harvest. Several industry insiders, including French producers, told Fortune that 2021 is expected to be one of the worst years in recent memory.

“We’ve lost 90 percent of our grapes,” Christine Piot, whose family business in northeastern France ships around 1,200 bottles of Champagne Piot Sevillano to the United States most years.

French officials cited by Les Echos, a news outlet in France, estimated this year’s harvest will be the smallest in decades.

Gabe Barkley, CEO of MHW, Ltd., a U.S. wine and spirits importer, told Beverage Industry Enthusiast that the various impacts to champagne production mean prices will probably continue to rise over a longer term.

“We do anticipate that reduced production in recent vintages will affect the market for years, with 2023 through 2025 being the most impacted by volume,” Barkley told the outlet.