In recent days, Arnault has instead found himself shivering in an ice bath of Trumpian realpolitik. The French owner of the LVMH luxury goods conglomerate has seen some $11bn (£8.6bn) wiped off the value of his company in the wake of the US President’s decision to impose swingeing tariffs on products including Arnault’s stable of luxury marques from Dior to Dom Pérignon champagne.
According to the industry body for French wines and spirits, some €800m (£686m) of annual exports to the US are estimated to have evaporated the moment Trump announced his 20 per cent levy on all goods entering America from the European Union.
But eventually that stockpile will dwindle and the likes of Arnault’s Moët label will need to find alternative markets for champagne that was otherwise set for America.
Bernard Arnault has grown his LVMH group into one of the world’s biggest luxury conglomerates (Photo: Thibault Camus/AP Photo)Britons last year bought some 22.3m bottles of champagne worth €519m (£445m) – second only to the US which, which consumes some 27m bottles a year.
With bottles from well-known brands now routinely costing £40 or more, insiders say the trade turbulence caused by Washington will mean producers look to established markets like Britain to maintain or boost sales.
“I think we will see producers coming in with promotional activity just as they do at Christmas, Easter or over the summer to generate interest from consumers and kick-start sales. Champagne is there to serve as that ‘affordable luxury’ – a bottle at home is going to cost you about the same as the one above entry level on a restaurant wine list. It is something to celebrate or to just make things a bit better amid all the uncertainty.”
The buyer said: “The champagne houses have been doing this for a very long time and they understand their market. There is already an expectation that the UK could return to being the number one export market ahead of the United States and they will be pricing keenly to ensure it’s the drink people think of when they want to celebrate.”
On one level, French and European wine makers can breathe a small sigh of relief after a rattled Trump did not, as yet, make good on a threat to respond to proposed retaliatory levies from Brussels on iconic US products such as bourbon and jeans with a ruinous 200 per cent tariff on EU wines and spirits.
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The friendship between the two men goes back to the 80s when Arnault left France under the presidency of Socialist leader François Mitterrand and began to invest in the New York property market, where Trump made his own name and fortune.
In the wake of his visit to Washington, Arnault, whose luxury goods empire makes about a quarter of its sales in the United States, was quick to express his admiration for American entrepreneurship, comparing what he considered to be France’s high tax environment to being a “bit of a cold shower”.
As one champagne executive put it: “If you are in the luxury segment, the point is not to be panicked by short-term disturbances. The tariffs will eventually pass but the point is to show that the Bollingers or Laurent Perriers of this world will still be there when the storm has passed.”
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