Champagne is a term that applies to sparkling wines that are from the Champagne region of France. This name is protected, in Europe, by Protected Designation of Origin status and in France by Appellation d'Origine Contrôlée, both of which state that to use the name "champagne," the wine must be produced in France, in the Champagne region and in a traditional manner to produce a specific product. Everything else is just a sparkling wine, not champagne.
This standard is followed throughout Europe and many other countries, although the US, for example, does not follow it and any sparkling wine can use the word champagne, which is considered to be a generic term. In France, the word carries a premium image and a premium price, so there is an incentive for sellers to use it instead of other descriptors. Just last week, the police arrested a number of people for passing off "tens of thousands of bottles of low-priced bubbly wine" as champagne, selling it for 5 to 10 times the original price after replacing the bottles' labels with false champagne labels. Most of these wines were sold "via associations or in door-to-door sales," which goes to show that if you want a premium product, you are better off going to a reputable source.
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