Managing price cycles in the Champagne industry

On average, it takes three years to produce Champagne from the raw grapes, so the adjustments of supply to demand lead to jumps in retail prices during economic booms and drops in retail prices in periods of stagnation/recession. This cycle disturbs consumers and seriously affects vine growers and wine makers. This paper reports how both professions have learned from experience, and have been able to negotiate terms with retailers to limit price swings. A producer–retailer cycle is exhibited with 3 loops over the period 1978–2003. [EconLit Citations: D430, L290, L660].