Shoppers are tempted when they can buy a good bottle of foreign bubbly for 10 euros less. “For Champagne,” Viet said, “there’s a feeling that the price doesn’t always correspond to the underlying product.”

Champagne producers shouldn’t expect near-term relief from their biggest export markets. In the U.K., a series of unmet Brexit deadlines contributed to a buildup of stocks that could weigh on demand in coming months as retailers unwind excess inventories, according to Thibaut Le Mailloux, a spokesman for industry lobby Comite Champagne.

The U.S., the second-biggest overseas destination, is threatening 100% tariffs on the drink in response to a French digital-services tax affecting the likes of Alphabet Inc.’s Google and Inc.

Laurent-Perrier shares have dropped about 7% in the past 12 months, compared with a 30% gain for France’s CAC AllShares Index. Another top producer, Vranken-Pommery Monopole SA, slipped 15%, while Lanson-BCC declined 10%.
Grower Champagnes

While volumes are falling steeply, the outlook isn’t entirely bleak, as the value of the domestic market has declined less. That’s thanks to bright spots like Champagnes from small growers, which wine shops and restaurants are encouraging consumers to drink with food. Luxury labels like LVMH’s Ruinart are also expanding thanks to revamped marketing that’s positioned it as a favorite of the fashion crowd.

Etienne Calsac, an independent producer, said the French supermarket law hasn’t hurt him, but he worries about the trade spat with the U.S., where so-called grower Champagnes have become popular in recent years.

“I could adapt and get some other markets to take more bottles,” he said. “But for the Champagne sector on the whole it would be catastrophic if these tariffs go through.”

--With assistance from Thomas Buckley.

This article was provided by Bloomberg News.

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