Winelander – June 2, 2023

0
130

Array
(
    [top dis] => 
    [bottom dis] => 
)

Today’s article concentrates on Treasury Wine Estates, their brands and what’s in the future as Australian wines once again find their way back into the Chinese market after suffering three years of punitive tariffs brought about after questions were asked with regards to the source of Covid. Treasury is the pinnacle of wine production in Australia as several of the wine labels are iconic but in reality their market share certainly doesn’t show the strength they could have with the brands they have purchased over the last forty years. The company began with Penfolds, a winery that was officially established in 1844 when the winery was expanded to produce table wines instead of just fortified wines and they started producing Claret and Riesling.

Fast forward to 1976 when the Penfold Family was sold to Tooth and Co a brewer based in New South Wales, then in 1982 ownership passed to The Adelaide Steamship Company and the Penfolds Brand was merged with Kaiser Stuhl, the term merged gives a warm fuzzy feeling of comradeship and cooperation in the growing of two of the mega companies in the Australian wine industry, however in reality the Penfolds staff really let the Kaiser Stuhl people know this was a takeover not a merger, I know because I worked for Kaiser Stuhl at the time!. In actual fact the two brands actually complimented each other with the premium Penfolds red wines, Minchinbury Champagne (as it was called those days), fortified wines such as Club Port being supported by the Kaiser Stuhl sparkling Summer Wine, four litre casks, flagons and fluffy table wines such as Black Forest Moselle and Gold Medal Rose which were very popular wines.

Soon Wynns Wines were added to the stable along with Seaview, Killawarra and Tollana and once again no sales were affected as it was manageable, the Seaview Champagne was considered a step up from Minchinbury and Killawarra a step up again and the Seaview range of table wines offered outstanding value, overall I reckon the company now had in excess of 40% of the Australian wine market but this was about to change with more takeovers which started to make the customers uncomfortable with dealing with one company who seemed determined to force any competition into the ground.

Seppelt Wines, Lindemans/Leo Buring Wolf Blass Wines were taken over and the company was acquired in 1990 by SA Brewing and subsequently the company divided their business into three separate entities, the brewing assets retained the S.A. Brewing name, the wine assets were named Southcorp Wines and the ‘white goods’ and other manufacturing interests became Southcorp an Australian conglomerate with Rothbury Estate and Rosemount were added, the company should now have control well in excess of 60% of the Australian wine market but was probably closer to 40% and Dean de Bortoli when asked whether the merges affected his business claimed after each takeover his business grew by at least 5%!

In 2005 Southcorp Wines became a part of The Fosters Group and 2011 when it was obvious the match of combining beer and wine wasn’t the marriage that was expected and so in 2011 Fosters demerged the wine operation and it became Treasury Wine Estates (TWE) is headquartered in Melbourne and listed on the stock exchange.

In 2013 Penfolds was awarded “New World Winery of the year” by the American wine industry publication Wine Enthusiast Magazine, in 2016 the Most Admired Wine Brand by Drinks International. In 2017 Penfolds Grange was classified as a First Growth in Liv-ev’s recreation of the Bordeaux 1855 classification and the only Australian winery to receive a perfect 100 points for the Grange 2008 from both The Wine Spectator and Wine Advocate, also Grange 1955 vintage was named one of the top 12 wines of the 20th century by The Wine Spectator what could possible go wrong.?

Treasury Estate Wines certainly suffered badly when the Chinese introduced 250% tariffs on Australian wines but this may be about to change as the Chinese consider removing them, it was reported several years ago Treasury were considering making Penfolds a stand-alone brand because of the profitability of the brand and rumours are circulating that there is about to be a very large product cull at the lower end of their priced products and concentrate on the higher more profitable wines which would improve the bottom line but probably lead to large layoffs and certainly improve the stock market price.

Along the way many of the wines and wineries that ‘merged’ with the company have vanished, Kaiser Stuhl, Tollana, Seaview (apart from the Sparkling wine) most of Seppelts labels, Leo Buring, most of Lindemans brands, and Rosemount is a shell of its former self and Rothbury Estate of Len Evans fame became a restaurant own label wine. After last month’s article on Prosecco it was revealed the Italians are very much trying to close down the Australian version of the product, quite timely don’t you think.