July 04: Starting 2022, it may be difficult to tell wine drinkers in India whether the Penfolds they are drinking is from Australia or the US as the parent company Treasury Wine Estate announced yesterday that the world’s biggest listed wine producer will produce the premium Penfolds brand in California as part of company’s North American strategy, starting with grapes from the current harvest
Penfolds Chief Winemaker Peter Gago said in a Statement on Tuesday that they would use grapes from California’s Napa Valley from the 2018 harvest onward. “We are striving to add outstanding Californian-sourced wines to our offering by fiscal 2022.This will broaden our base and help future-proof Penfolds," he said at a launch in Adelaide on Tuesday.
Mr Gago made a light-hearted comment that despite the Californian sun above and soil below, "everything in between" would be pure Penfolds, from barrels to open fermenters. "All the techniques that have worked here will be used to craft and create Californian styles."
He insisted the new plans would do nothing to hamper local production. "This is not an overnight thing, this dalliance in California," Mr Gago said. "We've been working in California for many years.”
Although the company denies that this plan has anything to do with the current impasse with their major market China which has slowed down the clearing of its wines through customs for the last 3 month, analysts claim this is a result of that impasse though the clearance has started happening though slowly. The company claims that the idea to produce the brand outside Australia had been under discussion for several years.
The plan to produce a premium wine in the United States comes five years after the company had to destroy millions dollars worth of low-end brands in the US, that failed to sell in the U.S. market and had created a major upheaval in the company’s fortunes. The company insists that it is setting Penfolds up for the next phase of growth.
TWE said it also planned to export wine from California. But the trade analysts fear those plans could be affected by trade disputes between the USA and China which has recently threatened a 15 percent tariff on U.S. wines in retaliation to President Trump imposing duties on the Chinese imports.
Australian wine exports to China surged with a 2015 free trade deal and changing consumer tastes, but the latest tensions suggested industry sales this year could miss a forecast to top A$1 billion ($738 million). Wine shipments have slowly resumed passing through Chinese customs, said Tony Battaglene, chief executive of the Winemakers Federation of Australia,
Although the Statement does not clarify which labels of Penfolds would be also produced in California, it is very doubtful if the iconic Grange or a few of the other top ended labels will be produced in the US, according to delWine. With this decision, the company is also snubbing the experts’ view and those of connoisseurs that it is the terroir that defines the quality and character of a wine.
This is not the first time that labels from Treasury Wine Estate will see foreign shores as the source of origin. Their popular label Lindeman’s, then under Foster’s, tried to become the biggest brand in the world by the company announcing that it would be made out of Australia also- in Chile and South Africa, in 2006.
For earlier related Articles, please visit:
Genesis of Wine Export from Australia to China (Part 1)
Passing By: Treasury looking for Treasure in the Unites States of India
Subhash Arora
If you Like this article please click on the Like button