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Your email address will not be published.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

Brand Ambassador – Santa Rita Estates

Santa Rita Estates
London or Hertfordshire but with flexibility to travel, UK

Sales Executive - Wine and Spirits Awards

The Drinks Business
Central London, UK

On-Trade Channel Manager

Delegat Europe Limited (UK)
London / Midlands, GB

Trade Marketing Analyst

Delegat Europe (UK)
London, GB

Key Account Executive

Delegat Europe Limited (UK)
London / Midlands, GB

Senior National Account Manager

Bibendum PLB
London, UK

ON-TRADE Sales Executive

Roberson Wine
London, UK

OFF-TRADE Sales Executive

Roberson Wine
London, UK

Judging Week Runners

Decanter World Wine Awards
ExCel Centre, London E16, UK

Sales Administrator

Les Caves de Pyrène
Guildford, UK

Retail Commercial Executive

Laithwaite's Wine
Theale, Berkshire

Wine Buyer

Conviviality Plc
Crewe, UK

Sales Account Manager - On-Trade

Berkmann Wine Cellars
Liverpool

Sales Account Manager - On-Trade

Berkmann Wine Cellars
M3/M4 corridor

Media Sales Manager - Hong Kong

The Drinks Business Hong Kong
Hong Kong

The Global Merlot Masters 2017

Deadline : 31st March 2017

The Prosecco Masters 2017

Deadline : 10th March 2017

db Awards 2017

Deadline : 28th April 2017

The Global Organic Masters 2017

Deadline : 3rd March 2017

Click to view more

The Global Sparkling Masters

the drinks business is thrilled to announce the launch of The Global Sparkling Masters

The Global Rosé Masters 2016

the drinks business is proud to announce the launch of the Global Rosé Masters 2016.

The Prosecco Masters 2016

Now in its third year, the competition will reflect the growth in popularity of this fresh and exciting sparkling wine from the picturesque regions of Veneto and Friuli.

The Global Pinot Noir Masters 2016

After the success of last year’s competition that judged over 250 wines from no less than 16 countries, the drinks business is proud to announce the third year of the Global Pinot Noir Masters

Click to view more