Pop. Fizzle. The sound of a champagne bottle opening is as iconic as the product itself. From the lavish parties described on the pages of The Great Gatsby to the glittering balls depicted in Bridgerton, champagne has historically been associated with luxury, celebration, and prestige in many cultures.
And behind every sip lies a complex market shaped not only by supply and demand, but also by an intricate network of community ties, relationships, and social expectations.
In a study, Amandine Ody-Brasier, Associate Professor of Organizational Behaviour at McGill University, explores how social relationships influence pricing in the market for champagne grapes. While conventional wisdom often assumes that prices are purely determined by market forces, Ody-Brasier’s research shows otherwise: communal norms and social ties can play an equally powerful role in price-setting decisions.
“This paper is about more than supply and demand,” she said. “It’s about how markets set prices, but communities determine what prices are appropriate.”
Off the scale
There are many kinds of sparkling wines available on the market. But authentic champagne can only be produced using grapes from the Champagne region in France, a strictly defined geographical area.
In this small region, independent grape growers supply their harvest to wine houses, which transform the grapes into the renowned drink sold across the globe. This dynamic gives growers considerable bargaining power, establishing them as the price setters and buyers as the price takers.
At first glance, one might expect growers to leverage their position and charge the highest price they can obtain. In reality, the situation is far more nuanced.
Pricing decisions in Champagne are shaped by long-standing traditions, explained Ody-Brasier. Historically, grape prices have been guided by a system known as the échelle des crus (translation: “scale of vintages”), which ranks each village in Champagne according to the quality of its grapes. This determines a benchmark price for each harvest.
These days, the Comité Interprofessionel du Vin Champagne recommends grape pricing aligned with market forces, but the échelle rankings remain an important reference point. Growers still use the scale as a guideline for what is an appropriate price for their grapes.
But, as Ody-Brasier’s research reveals, rather than taking advantage of their bargaining power, growers often deviate from the suggested pricing – and may even accept lower prices – when buying and selling within their own communities.
Grape relationships
Why would growers accept a lower price when both the échelle and supply-demand economics allow them to charge more?
According to Ody-Brasier’s findings, the answer lies in the community ties and social norms which shape everyday life in villages in the Champagne region.
This is what she calls the logic of appropriateness. Many growers live and work in small villages where social circles overlap. Vineyards stretch across small villages where many families have grown grapes for generations. Business partners may also be neighbours, relatives, or longtime acquaintances. In such tightly knit communities, maintaining relationships and goodwill can be just as important as maximizing profit.
These social connections can create a sense of care and obligation, which stops growers from charging higher prices to local buyers, encouraging them to adhere to traditional pricing norms.
Alternatively, local sellers may also determine prices based on long-term business partnerships, loyalty, and respect. Ody-Brasier calls this the logic of consequences. In this scenario, buyers and growers engage in a give-and-take that is mutually beneficial for both parties long-term. For growers, this may mean offering flexible pricing when buyers face difficulties. For buyers, it can involve maintaining stable partnerships and continued demand.
“The logic is still to maximize, but it’s to maximize for everyone’s benefit,” said Ody-Brasier.
This speaks to the key takeaway from her study: markets are not driven purely by supply and demand. They’re embedded in social networks, cultural norms, and shared identities that shape how people behave.
“The reality is that there is a norm, and the norm remains very strong,” she said.
This story is based on Professor Ody-Brasier’s study, “The Price of Belonging: Price Setting in the Market for Champagne Grapes.” Read it here.
This article was written by Mahin Siddiki, Content Assistant, McGill Delve
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