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'Cheap Grande Marque Champagne skews the demand curve' blog
in Martin's blogs & appearances & MoneySavingExpert in the news
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Former_MSE_Penelope Former MSE
This is the discussion to link on the back of Martin's blog. Please read the blog first, as this discussion follows it.
Read Martin's "Cheap Grande Marque Champagne skews the demand curve" Blog.
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Interesting blog though, people always want to pretend to be richer than they are.
The classic case of brand snobbery is, or rather was, the 'reassuringly expensive' Stella Artois. What on earth was that supposed to mean? People paid high prices for it in the UK because of the advertising, whilst in the rest of Europe it was just a cheapish utility brand - exactly what it is in the UK now!
The perfume manufacturers are every bit as bid, trying to block sales in cheap outlets such as Superdrug and eBay. The ridiculously high prices charged for a bottle of perfume costing maybe 50p to manufacture can only be kept high if the brand image is hyped and made to sound exclusive and expensive.
Have a lookie here: http://en.wikipedia.org/wiki/Veblen_good for a brief explanation.
Wonderful to read- always wanted to remember the term - will amend my blog thank you
Please note, answers don't constitute financial advice, it is based on generalised journalistic research. Always ensure any decision is made with regards to your own individual circumstance.
You can made the same argument about all the Grand Cru and Premier Cru wines. It's all about whether you believe (and/or can taste) if the soil makes any discernible differences to the wine.
Earlier this year the number of Champagne villages is supposed to have grown (see wikipedia) from 319 to 357. Giffen good or not, the Grande Marque champagne houses may only be seeking to dump their glut of expensive grape juice in expectation that the price of grape juice will reduce in the future. In August The Economist already reported that the champagne houses are moaning about having a glut. Now with new villages brought in the glut is only going to grow bigger.
Say the new villages have not a stick of vine, it won't take that v long to convert their current agricultural production to grape production. After Prohibition was repealed in the US, it took the Californian winemakers less than a decade to recover - and it only took so long partly because of poor weather and partly of marketing positioning problems as they were unsure what to call their wines - Epernay and Reims will be flowing with grape juice in no time!
Say if I were LVMH or Bollinger, I will try to turn a lot of my champagne into cash and buy up as much of the new villages' land as possible. This way I will be able to hold down the prices of grapes (you only need to have 51% grape juice taken from Champagne grapes to make champagne) and uphold the prices of champagnes. Else if the land are bought by cooperatives, new entrants, etc., it really will be champagne for everyone!