Champagne brands at record prices in run up to millennium

Champagne brands are changing hands at record prices as pubs prepare for a surge in demand before the millennium.French drinks group LVMH has bought...

Champagne brands are changing hands at record prices as pubs prepare for a surge in demand before the millennium.

French drinks group LVMH has bought champagne house Krug from Rémy-Cointreau for £107m.

It will be added to LVMH's portfolio which includes Moët et Chandon, Dom Pérignon and Veuve Clicquot champagnes and Hennessy cognac.

It is the highest price ever paid for a champagne producer and the fifth deal in that sector over the past 12 months.

Champagne production is expected to rise to 300 million this year - about 30 million more than an average year - because of celebrations for the year 2000.

The Krug acquisition is due to be followed by Seagram's sale of its Mumm and Perrier-Jouët champagne brands.

They were set to be bought by Société Financière des Vins de Champagne but the deal collapsed after venture capitalists pulled out.

However, the Canadian drinks giant claimed it had been approached by several other would-be buyers.

Champagne brands will become even more valuable in five years' time when France's Champagne region will be officially barred from expanding.