Moet’s price dispute with Dan Murphy’s adds to champagne woes

Moet Hennessy Australia finds itself in a price dispute with one of its own biggest customers, Dan Murphy’s.

The stand-off between Dan Murphy’s and Moet Hennessy Australia has led to stores running empty on the company’s biggest selling champagne and wine brands. Picture: Kiel Egging

The nation’s biggest wholesaler of champagne has warned that the COVID-19 pandemic and associated economic shock would likely have a negative impact on beverage sales, as well as shake its customers and suppliers.

Moet Hennessy Australia, which owns the Moet brand as well as Chandon, Cape Mentelle and Cloudy Bay wines, finds itself in the middle of a price dispute with one of its own biggest customers, Dan Murphy’s, with the stand-off seeing stores run empty on its biggest selling champagne and wine brands.

Moet Hennessy Australia is part of the French luxury goods conglomerate LVMH and The Australian revealed last week that a fight over wholesale pricing that flared up in February had led to Dan Murphy’s being unable to restock its supplies.

While it leaves Dan Murphy’s, owned by Woolworths, short of Moet, which represents around 40 per cent of all champagne sales in Australia, it also means LVMH is robbed of its biggest sales channel as the two parties fail to agree on pricing, threatening hundreds of millions of dollars in revenue.

The champagne house is facing a bleak 2020 with COVID-19 and social distancing regulations likely to have an impact on sales of French bubbly during the crucial spring and summer months. Picture: Jenifer Jagielski

Accounts lodged with the corporate regulator by Moet Hennessy Australia revealed the size of its market in Australia. Moet Hennessy recorded $304.96m in sales in 2019, down slightly from $310.8m in 2018. Its profit in Australia was also down to $12.9m from $15.2m in 2018.

At last week’s full-year results for Woolworths, chief executive Brad Banducci declined to comment on the dispute with LVMH other than to say the issue was being worked on by executives.

Meanwhile, the champagne house is facing a bleak 2020 with COVID-19 and social distancing regulations likely to have an impact on sales of French bubbly during the crucial spring and summer months, which are peak champagne consumption periods.

This follows a disappointing 2019 with France’s Comite Champagne recently reporting champagne exports to Australia dropped 8.7 per cent to 7.7 million bottles in 2019.

The dispute with Dan Murphy’s won’t help Moet Hennessy either with shoppers on the liquor outlet’s website looking for Moet being directed to rival champagne Mumm, Perrier-Jouet or Pol Roger.