Penfolds Focuses on the Chinese Premium Market
France’s luxury wine groups are ahead of Treasury Wine Estates in China when it comes to sourcing Chinese-made products.
Treasury Wine Estates sells Penfolds Champagne, which is made in France, to China. However, other luxury producers have been making red wine in the country for years.
In 2016, Moet Hennessy, a drinks division of LVMH, introduced Ao Yun, a luxury red wine brand, in China. The brand was established after the company planted several different types of grapes in the country’s northern Yunnan province.
In 2019, a French luxury wine company, Chateau Lafite Rothschild, introduced Long Dai, its first Chinese-made wine. It started its operations in China in 2011. The company initially planted several hundred acres of grapes in the coastal province of Shandong in 2011. It was initially a long-term project, and the company’s winemakers had to deal with unfavorable weather conditions.
Dr. Tony Jordan, an Australian oenologist, went to China to study the country’s wine industry. He was a part of a luxury goods group based in France.
During his time in China, he looked into potential regions where red wine could be made using Chinese grapes.
Treasury Wine Estates announced on that Penfolds would be the first “made in China” product to hit the country’s domestic market in 2022.
The Penfolds version of red wine would be priced at around $30 to $50 per bottle. It would be an entry-level product that would appeal to the casual drinker. The flagship Penfolds Grange, on the other hand, costs around $850 to $950 per bottle.
The company would continue to focus on the protection of its intellectual property rights. Over the years, the company has put a lot of resources into developing and implementing strategies to prevent counterfeiters from using the Penfolds brand.
In 2018, Treasury Wine Estates revealed that it would start making a line of Penfolds red wines using grapes from California’s famed wine region of the Napa Valley. The first of these products was scheduled to hit the market in 2021.
Although the exact make-up of the Penfolds “made in China” red wine has not been revealed, Penfolds said that it would feature a large portion of cabernet sauvignon grapes. He said that it would meet the company’s strict quality standards and wouldn’t affect the brand’s global reach.
The company’s entry into China came just before the country imposed heavy tariffs on Australian wine products in late 2020.
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