• Wednesday, May 29, 2024
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Nigerians’ champagne consumption hits 8-year high

Nigerians’ champagne consumption hits 8-year high

Champagne shipments from France to Africa’s most populous nation have surged to the highest level in eight years, data obtained by BusinessDay show.

Nigeria’s champagne import volumes increased by 15.3 percent to 644,452 bottles in 2022 from 559,088 bottles in 2021. The value also rose by 17.8 percent to £25.3 million last year, according to data compiled by Comité Champagne, a trade association that tracks volume and value of exports from France.

The level of champagne imports into the country has been rising since 2020, when it plunged to a record low of 304,199 bottles from a high of 768,131 bottles in 2014, the data show. That of 2022 is the highest under the President Muhammadu Buhari administration.

Globally, 326 million bottles of champagne were shipped in 2022, an increase of 1.6 percent over the previous year. The top five biggest champagne markets are the United States of America (33.7 million), United Kingdom (28.1 million), Japan (16.6 million), Germany (12.3 million) and Italy (10.6 million).

Africa’s biggest economy moved up by four places, ranking 28th out of 192 countries from 32nd in 2021. This improvement also made Nigeria the second biggest champagne market in Africa behind South Africa, with 1.3 million bottles.

“The return of consumer confidence post-COVID, plus stability in some sectors like financial services, oil and gas, and the consumer goods sector may be responsible for the increase in champagne volumes,” Victor Ikem, a Lagos-based champagne and wine retailer, said.

He said throughout the second quarter till Q4 last year, there was an upsurge in political activities, which meant that a lot of disposable cash was available in the system and a number of high-profile political events were held which must have impacted on the consumption of champagne and other alcoholic beverages.

“That being said, it is very important to state that all these factors contributed to varying degrees to the growth recorded despite the inflation now nearing 22 percent, unemployment around 33 percent, and the several other headwinds,” he said.

Uchenna Uzo, a consumer expert and faculty director at the Lagos Business School, said the increase in champagne consumption is not across all the segments of the economy but that there is a small group of continuous orders from the affluent and political class.

“So, the spike that you are seeing is from occasions and events hosted by the upper class,” he said.

Champagne, a French sparkling wine, has become more than just a mere alcoholic beverage in Nigeria. The drink, which is associated with luxury, has long been the go-to drink for celebrations.

Read also: Nigeria’s food importation gulps N1.9trn in 2022

Many Nigerians love to pop the drink to celebrate happy occasions, from birthdays to weddings to clubbing and spending time with friends. The champagne brands are at the higher end of consumers’ lifestyle.

“Champagne is a lifestyle drink that people use to signal aspiration value, their status and celebrate their achievements. So, it is not a discretionary product or stable or fast-moving consumer item,” Uzo said.

A BusinessDay survey across some retail stores in Lagos showed that the prices of different champagne brands such as Moet Imperial (Brut), Moet Rose, Vurve Cliquote, Don Perignon and Cristal range between N50,000 and N200,000.

Abiola Gbemisola, a consumer goods analyst at FBNQuest, said the demand and supply of luxury goods are not really affected by inflation levels in the country. “It is affected by the wealth levels of the buyers and the ability to play within that space.”

He said Nigeria’s economy from an events perspective is better now than before as there has been a recovery in spending on luxury items.

Although the champagne market is improving, it is yet to get to the level it was in 2013 when it recorded 768,131 bottles due to the high cost of foreign exchange and introduction of luxury tax. This has increased the cost of champagne, making consumers to seek cheaper alternatives like wine.

“Nigeria’s high inflationary pressures has made less people to consume champagne but more people to consume affordable quality wines that trade in the retail region between N2,000-N5,000,” Ikem, the wine retailer, said.

Data from Euromonitor International, a London-based market research company, show that Nigeria’s wine consumption rose to 33.1 million in 2021, the highest since 2015, from 32.0 million in 2020.

“Wine is becoming more popular in Nigeria year on year, increasing volumes. Moreover, major companies such as Distell had double-digit growth in volume terms in Nigeria, with brands such as Chamdor (sparkling wine) and 4th Street (still wine) performing strongly,” Christopher Day, a research analyst at Euromonitor International, said.