In March of this year, after months of speculation, the 2020 tariffs applied to Australian wine were lifted by the Chinese government. In January, when we accompanied students on a tour of South Australia, wineries were undoubtedly preoccupied with the rumored tariff lift and rife with discussion as to what extent prospective orders were being placed, since some wineries were also jostling for new import and distributor representation.
Prior to the effective collapse of Australian wine in China, mainland China had been Australia’s top export market by value, with not only Treasury’s Penfolds being the Aussie fine-wine brand of choice but other notable wines, often from the Australian First Families of Wine or placed in the Langton’s Classification, having something like a cult following. Indeed, just prior to 2020, Australia had already toppled France as the most significant country of origin for value of imports in the mainland Chinese market.
While in Australia, one student privately expressed a surprising lack of enthusiasm at the prospect of visiting both Penfolds’ Kalimna and Magill Estates, which we’d felt were must-stops for a mainland China group thirsty for the iconic brand and to facilitate understanding of facets of Australian wine history. At dinner at Magill, a specific request revealed the reason for her reluctance. Would it be possible to taste a genuine bottle of the Bin 407 Cabernet? This wasn’t on the menu, as the Penfolds team were rolling out the choicer barrels in all senses (showing the likes of 2010 St Henri and 2010 Grange). But the proliferation of counterfeit bottles of the two Bin wines most used for business dinners and gifting in China—Bins 407 and 389—was what occasioned this request. A bottle of 2009 Bin 407 was duly presented, its provenance in no doubt, and this proved a revelation to the nominal “Penfolds-wary” guest.
This anecdote raises some interesting questions when considering the return of Australian fine wine to China in a postpandemic era where a flagging economy and collapsing real-estate bubbles, as well as supposed declining consumer interest in wine, are all concerns. And to what extent and how does one differentiate between Australia bouncing back—in some supposed figure of eight—and the Penfolds effect? Are other Australian fine-wine brands riding on the coattails of Penfolds, or will they be pirouetting in their own way as they return to the dance? Moreover, not everyone in Australia’s fine-wine community is falling back over themselves to reengage with China, though the majority are eager for potential new opportunities.
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A competitive fine-wine market
Penfolds was certainly back in full force in Beijing recently, choosing to launch the Penfolds Collection in the Chinese capital on the eighth day of the eighth month, no less. Prior to Peter Gago’s masterclass—which notably included the second vintage of the CWT Chinese Winemaking Trial Cabernet Marselan, sourcing fruit from Yunnan and Ningxia—there was a lunch featuring vintages of Yattarna, Bin 150 Marananga Shiraz, and the RWT Shiraz, as well as the very newly launched 2021 Bin 180 Coonawarra Cabernet/Shiraz, which commemorates Penfolds’ 180 years in operation. Gago revealed that larger formats of this commemorative wine were already sold out (but did not state if there had been mainland Chinese buyers). An F&B contact in Sydney subsequently confirmed that the Jéroboams of Bin 180—at the princely sum of A$18,000 each—were indeed already mopped up. One wonders by whom.
We had spoken with some of Treasury’s top brass earlier in May in Hong Kong, having spent a full day with Andrew Caillard MW and Peter Gago tasting through select vintages of the Bin 407 and RWT Shiraz as part of a panel for what will be the 9th edition of The Rewards of Patience. The mood was certainly buoyant, but there must also be some emerging concern that things will not come full circle in mainland China all that quickly, even for the likes of Penfolds. Treasury is also notably slimming down its portfolio, having divested itself of Wolf Blass recently.
To some extent, Treasury and others who are playing an Australian fine-wine game, at least to certain volumes, will be relying in part on the return of China and anticipating how to allocate the bountiful 2024 vintage. Treasury has already hiked prices on the Penfolds Bin & Icon ranges as of July of this year, having also reportedly limited production during the tariff period. And while Wolf Blass may no longer be part of its offering, it’s notable that Treasury is trying to woo an entry-level consumer with Penfolds Max’s (188RMB) and its other Chinese wine Penfolds One (278RMB), as well as Bin 28 Shiraz (288RMB) and the more premium Bin 389 (488RMB), all easily orderable straight to your door or restaurant through the Hema supermarket app.
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But one should not forget that despite the decline in volume in mainland China for, say, Chile, Australia is—at least on one level—returning to a competitive market where the wines of the Errázuriz stable and Viñedo Chadwick, as well as Gandolini and the increasingly popular fine wines of South Africa, are all vying for space.
Follow the 8s, and perhaps we’ll see who comes around again in this unusual market, one perhaps more akin to breakdancing than figure skating.
