Penfolds to set minimum price

28th July, 2011 by Patrick Schmitt

Treasury Wine Estates is to set a minimum release price for Penfolds Grange next year and plans to increase production long term.

David Dearie, the new CEO of the company, which was separated from the Foster’s Group in May, told the drinks business that he wanted to put an end to inconsistent pricing for the iconic Australian wine and improve the supply for emerging markets.

Speaking of last year’s releases, he said: “We could have sold almost every bottle of high-end Penfolds and Lindeman’s in Asia alone,” adding: “We didn’t make enough.”

Hence Dearie has been working on “reallocating our luxury wines” and, for the future, “looking at meeting the demand.”

This, he cautioned, won’t involve “massively ramping up production, but making some more to get closer to satisfying the demand”.

Referring to Penfolds “Luxury and Icon Range” specifically, which includes Grange, he said: “We are likely to invest in more contracts, more land, more oak and storage facilities, so we can make a slow but steady increase in the availability of those wines”.

While he acknowledged that the limited supply of these fine wines is part of their appeal, he explained: “I don’t want them to be so scarce that I disappoint people.”

He is also setting a minimum release price for the 2012 allocation. “We realised our internal pricing was all over the place which meant the retailing price was all over the place,” he commented.

“Next year we will set a minimum price and you must hit that minimum price or you won’t get an allocation,” he said, referring to Treasury Wine Estate’s internal allocation and pricing strategy.

“We have been carrying out due diligence to ensure that retailers across globe are paying the same price for Penfolds whatever their geographical location,” he added.

“This will mean a significant price increase in some markets, and this may free up some wines to sell in those markets with better returns… we have got to optimise profitability”.

The next five vintages of Penfolds Grange have already been made and production for the label is estimated to average 9,000 cases.

2 Responses to “Penfolds to set minimum price”

  1. jamiegoode says:

    Isn’t that price fixing? Didn’t think that was legal!

  2. jamiegoode says:

    That’s much clearer, now the article has been modified and it has been made clear that Dearie is referring to internal pricing

Leave a Reply

Your email address will not be published. Required fields are marked *

Subscribe to our newsletters

Job vacancies

European Brands Sales Manager, Field Sales Managers and Executives

Amathus Drinks PLC
London, Brighton, E Sussex/Kent, Cornwall & Devon, GB

Commercial/Sales Manager

Crush Wines Ltd
Bremhill/Home office, GB

Wine Buyer

Adnams
Southwold, UK

Sales Manager - Scotland

Eurowines Ltd
Scotland

Sales Manager - North-West England

Eurowines Ltd
North-West England, UK

Sales Manager - London

Eurowines Ltd
London, UK

Key Account Manager - Grocery

Australian Vintage Limited
London (Croydon), UK

Key Accounts Manager - Impulse

Australian Vintage Limited
London (Croydon), UK

Business Development Manager

Regency Wines Ltd
North Devon & Somerset, UK

Sales Manager - North East England

Eurowines Ltd
Within 15-20 mile radius of York, UK

National Account Manager

Ehrmanns Wines
London, UK

London Account Manager

The Drinks Club
London, UK

London Sales Executive

Gourvid Limited
London and Greater London, GB

Logistics Administrator

Speciality Drinks Ltd
Park Royal, London, UK

Head of Sales - Hush Heath Estate

Hush Heath Estate
Kent/ London, UK

The Global Merlot Masters 2017

Deadline : 2nd May 2017

db Awards 2017

Deadline : 3rd May 2017

The Global Organic Masters 2017

Deadline : 2nd May 2017

The Global Sparkling Masters 2017

Deadline : 12th May 2017

Click to view more

Global Chardonnay Masters 2016

Now in its fourth year, the competition will identify the best Chardonnay from all around the world in every price range.

Rioja Masters 2016

Now in its fifth year, the competition will recognise and reward the finest Riojas on the world stage.

Fortified Masters 2016

Now in its third year, The Fortified Masters will reward the best fortified wines on offer.

The Global Malbec Masters 2016

the drinks business is proud to announce the inaugural Global Malbec Masters 2016.

Click to view more