Made-in-China Penfolds unfazed by recession rumblings: Treasury Wine

The boss of Treasury Wines Estate brand, Penfolds, is confident Chinese wine drinkers will embrace its made-in-China range despite the storm clouds gathering over the country’s economy.

Penfolds managing director Tom King said he is expecting the new Penfolds wine, made from grapes sourced from the Ningxia region, to be as well-received as its Bordeaux- and California-sourced wines.

“The demand at consumer level for Penfolds wine, whether that’s from China, the US or France, is significantly ahead of the supply we’ve got available. And that’s testament to the strength of the brand,” King said.

Treasury Wine ramped up its multi-country of origin approach after being forced to pivot around Beijing’s hefty tariffs on many of Australia’s exports, including wine. Though there is still significant demand for Penfolds, which King acknowledged is known in China as an iconically Australian wine, Treasury has been selling Penfolds made from France and the US in the market.

With demand outstripping supply, King said Ningxia Penfolds, launched in Shanghai on Thursday, should be bestseller despite China’s slowing economy and the ongoing punitive lockdowns that have suppressed consumer spending.

“From what we’ve seen already, the demand is still very much there.”

A bottle of 2020 Penfolds Red Blend China (Ningxia) or Red Blend California will retail for around 228 RMB (A$49).

Penfolds’ Shanghai launch of its Ningxia wine is part of a broader launch by of a new tier called ‘One by Penfolds’, which groups together its multi-country of origin wines from Bordeaux, California and Ningxia.

One by Penfolds will be available to Chinese customers from October and will be launched globally in the middle of 2023. It will eventually fold in new Penfolds wines from Australia.