The French Just Aren’t Quaffing Champagne the Way They Once Did

As President Donald Trump targets Champagne in an escalating trade tussle with Europe, makers of one of France’s quintessential luxuries are losing support from domestic drinkers.

French supermarkets have long helped drinkers stock their cellars ahead of the holidays with two-for-one promotions that cut the per-bottle cost to less than 10 euros ($11). This year, a new law aimed at boosting prices for farmers barred retailers from dangling such loss leaders. That contributed to a 34% slump in Champagne sales during retailers’ autumn wine fairs, according to research firm Nielsen.

“There will certainly be a lot of volume that is not finding a home, and that’s never good for an industry,” said Nathalie Viet, head of France’s Syndicat des Cavistes, a union of specialist wine sellers.

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 Alpphabet Inc.’s Google and Amazon.com 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%.

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.