Penfolds launches first China wine for global collection
Treasury Wine Estates has taken the next step in its China wine making strategy, launching a $150-a-bottle red wine from Chinese grapes as part of its 2023 Penfolds Collection.
Treasury Wine Estates has taken the next step in its China wine making strategy, launching a $150-a-bottle red wine from Chinese grapes as part of its 2023 Penfolds Collection.
Penfolds’ China Winemaking Trial 521 was launched in China on Wednesday, made of grapes from Yunnan Province in China’s southwest, and Ningxia in north-central China. It will be sold as part of the global collection, which will include $1000-a-bottle 2019 Grange from Australia, a $1000-a-bottle 2019 Quantum wine from California, and a $500-a-bottle Cabernet Sauvignon Merlot from France.
TWE chief executive Tim Ford said the launch of the first Chinese made Penfolds as part of its global collection, alongside wines from Australia, France and the US, was further evidence of its confidence in the long-term future of the Chinese wine making industry.
“We see a bright future for China as a premium and luxury wine making region,” he said.
The launch of the China Winemaking Trial 521 wine, a combination of Cabernet Sauvignon grapes from Shangri-La in Yunnan Province and Marselan from Ningxia, follows last year’s launch of the first Penfolds wine made from Chinese grapes, a $50-a-bottle entry level wine sold only in China.
TWE has stepped up its commitment to the Chinese winemaking industry in recent years, including a co-operation agreement signed last year with the China Alcoholic Drinks Association, despite China’s move to impose tariffs of more than 200 per cent on wine imports from Australia in March 2021.
The Australian wine industry, which sold more than $1.3bn in exports to China before the market was hit by the tariffs, is awaiting news from the World Trade Organisation about Australia’s challenge to the tariffs, which were widely seen as being largely motivated by the deterioration of political relations between the two countries under the Morrison government.
While relations have improved under Labor, and some trade measures on exports of Australian coal and cotton have been lifted, the tariffs on Australian wine and barley exports are seen as key issues to be resolved if relations are to strengthen.
Federal Treasurer Jim Chalmers this week expressed confidence that there could be more improvement in trade ties following a meeting with China’s Finance Minister, Liu Kun, at a meeting of G20 finance ministers in India.
Anthony Albanese is considering an invitation to visit China, which could come in October, which would mark the 50th anniversary since Gough Whitlam visited China as Prime Minister, but so far no date has been set.
The wine industry is watching closely as Australia and China are involved in negotiations over the future of Chinese tariffs on Australian barley, which have a deadline of August 11.
Wine is seen as the next cab off the rank with the industry hopeful that progress on tariffs on barley would provide evidence of China’s willingness to negotiate on its tariffs on wine, which were imposed a year after those on barley.
Federal Trade Minister Don Farrell, who has been arguing the case for an end to trade restrictions, visited China in May this year.
While wine consumption in China has fallen in recent years as its economy has slowed amid years of strict Covid lockdowns, the country is still seen as having the potential to become one of the world’s largest markets with the growth of its middle class.
Mr Ford acknowledged this year that the company, which has replaced exports from Australia with wine from France and the US in the China market, is not making any profit in the country but is committed to the market as a long-term investment.
The new Chinese Penfolds, which is very clearly branded as a trial, will be available from early August.
It was unveiled at a function in Shangri-La by Penfolds’ chief winemaker, Peter Gago, who has played a key role in overseeing the development of Penfolds in China.
Chinese consumers have a strong preference for red wine, with 60 per cent of the grapes planted in the country being Cabernet Sauvignon.
While Chinese consumers have shown a strong preference for imported wine, and have been prepared to pay up for globally known brands, consumers are now seen as more willing to consider locally produced products as the quality improves.
“Penfolds continues to appeal to consumers around the world as a hallmark of quality, luxury and innovation,” Mr Ford said.
“We look forward to continuing to collaborate with colleagues and partners in China to bring China sourced Penfolds wine to the world alongside the range from France, the US and Australia.”
Penfolds managing director, Tom King, who was based in Shanghai until the pandemic hit, said Penfolds was looking to appeal to a younger, tech savvy consumer or the “new luxurian” who is interested in fine wines while also looking for creative experiences.
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