Why the Dumb Money Is on Champagne Tonight

When it comes to sparkling wine, pros drink prosecco. The Italian bubbly is often the cheaper, lighter alternative to its French cousin. But New Year’s Eve is amateur hour, as the saying goes, which means the feting masses today will be forking out heady sums for official “Champagne.”

Prices for authentic Champagne—the sweet stuff coaxed from the chalky soils of northeast France—are at their highest point in at least 20 years, according to consumer price data compiled from the French government by Bloomberg. Consumers are paying 6 percent more for Champagne than they were five years ago and almost 22 percent more than revelers did on New Year’s Eve 2003.

The bubbly prices aren’t so much a function of demand as they are of a relatively short supply. A rash of frost, mildew, and fungus last year shriveled output of the three varieties of grapes that comprise a grand cru: chardonnay, pinot noir and pinot meunier. The 2012 vintage was the smallest in more than four decades.

This year’s crop has fared better, though France lowered its production outlook three times since a wave of hailstorms tattered vineyards this summer.

Not surprisingly, the really good stuff is getting particularly dear. Six cases of 2004 Louis Roederer Cristal sold for a record $2,260 apiece last month. A few days earlier, Sotheby’s auctioned two bottles of 1914 Moët & Chandon for almost $17,000, far more than expected.

Italian vineyards, meanwhile, have a bit of a glut of Champagne-esque options. They rolled out 330 million bottles of prosecco this year, compared with 300 million bottles of France’s Champagne. In short, the savvy spender is buying Italian spumantes tonight—or Spanish cavas or German rieslings. Even Long Island is reportedly bottling some decent sparkling wines.

Of course, there’s always Miller High Life, “The Champagne of Beers.” The price on that stuff is pretty static.

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