Penfolds’ $198,000 luxury barrel purchase program

Penfolds’ first public barrel purchase program comes with exclusive access to Magill Estate’s inner sanctum.

Luxury wine brand Penfolds has unveiled a one of a kind barrel purchase program.

Treasury Wine Estates has begun selling small vintages of luxury wine by the barrel to private collectors, with a trip to the Barossa Valley thrown in.

The move comes as the Australian vintner seeks to focus more on promoting its premium wines and less on the cheaper lines that a few years ago led the company to famously dump thousands of gallons of unsold inventory.

At a cost of $198,000 per barrel, the new wine from the Penfolds brand comes with an optional flight to the Magill winery in South Australia to sample the drop direct from its cellar, meet the winemakers and get a behind-the-scenes look at the winemaking process.

“Obviously it reinforces the prestige and the global credentials of the brand,” Simon Marton, global chief marketing officer for Penfolds, said in an interview.

The cost works out at about $590 a bottle, which compares to the $785 recommended retail price of Penfold’s Grange, the vintner’s most expensive wine, which is popular among collectors internationally.

Treasury Wine Estates Chief Executive Michael Clarke has focused the company on marketing 15 brands out of a portfolio of about 80. The strategy is part of a turnaround plan for the company that in 2013 was forced to destroy thousands of gallons of wine that had passed its drink-by date in the US, after it over-estimated demand for its lower-priced wines. Treasury Wine grew profit by 42 per cent in the first half of this year helped by surging sales in China and a strong pick-up in earnings in the US after several years of flat or falling profits there.

In the lead-up to Christmas last year, Penfolds began sending invitations to its top private collectors to participate in its first barrel program. The 2015 vintage has since been sold to collectors in Australia, Europe, Asia and the US, though the company won’t reveal the number of barrels, only saying it was “a very select few”.

It is a take on the barrel sales favoured by some wineries in the older winegrowing regions of France, Italy and Spain, who at times release a single barrel to be sold at auction. Last month Chateau Palmer announced plans to auction a barrel of its Bordeaux 2015 wine via a sale at Sotheby’s in Hong Kong. The presage estimate is $US65,000 to $US90,000. It does however, includes a trip to Bordeaux to visit the chateau, as well as a tasting and a dinner.

At the Magill Estate, barrel buyers will have access to the inner sanctum of the winery that is not available to anyone else and includes a chance to participate in some of the process of premium wine making, such as turning the barrels, Mr Marton said. “It’s about the wine, which goes without saying, but we are adding more into it as well by a unique experience,” he said.

A barrel program will produce a wine every year and is being called Magill Cellar 3 because it will be cellared in the winery’s oldest cellar, Cellar 3. The 19th-century cellar dates back to the founding days of the winery, established in 1844.

Penfolds publicly unveiled the program at Vinexpo in Hong Kong on Wednesday and is now inviting expressions of interest in its 2016 vintage.