Penalising loyal customers, milking a great brand
The wine merchant’s view
My wine posts are about the best wines you can get your hands on down under for 25 bucks or less. Full stop. To drink good wine, you don’t have to pay any more. To drink exceptional wine, you don’t have to pay much more either. That’s what I’m preaching.
When I wrote about the 2012 Penfolds Bin release, I missed this note in Decanter: “Jeff Poole, managing director of New Zealand’s Fine Wine Delivery Company, and a former employee of Penfolds, who said he has ‘championed’ its wines for more than 15 years, has criticised the brand this year after cost price increases of ‘up to 50%’. Poole said, ‘While it is the prerogative of any business to capitalise on increasing international demand and supply, we view this massive increase as a slap in the face’.
A number of UK merchants, who did not want to be named, also revealed that they would not be taking their allocation this year due to the price rises.
“The wines are released today with recommended retail price increases of around 20% to AU$37.99 for the Bin 138 Grenache Syrah Mourvedre blend and AU$64.99 for the Bin 407 Cabernet Sauvignon 2009. Bin 389 – dubbed ‘the poor man’s Grange’ – has risen more than 15% to AU$74.99. ‘To make the same margins on the wines that we did last year, we are going to have to increase our prices by $15,’ Poole said. ‘They have completely altered the proposition and are penalising loyal customers with the increases. As a result they are going to see some burning of the brand.’” http://www.decanter.com/news/wine-news/529785/penfolds-outrages-merchants-with-slap-in-the-face-price-hikes
No more poor man’s Grange
As I said in my post on this subject, Penfolds Bin Release 2012 – look elsewhere for value, Penfolds seems to have lost sight of the fact that it has sat on its laurels while other winemakers have pushed ahead – boutique makers producing hand-made wines at less than half the price of the poor man’s Grange. http://briard.typepad.com/get_the_picture/2012/03/penfolds-bin-release-2012-look-elsewhere-for-value.html
Since then, the initial discounts on the 2012 release Penfolds reds have vanished. Bins 28 and 128 are now $30, Bin 407 is close $50, and Bin 398 $60.This makes the new Penfolds reds look well out of their league. If you’re fond of Bin 28, you can buy the 2006 (a great year) at Dan M’s for $31. It’s part of their matured releases, and it shows up the folly of Penfolds’ pricing.
It’s not just boutique wineries that offer better value. For the last few months, you could buy Wynns Coonawarra black label Cabernet for $20. This is a 96 point wine from another big company in the same stable, for a third of the price of Bin 389. Or you can pay 10 bucks more than Penfolds is asking and get your hands on a Wynns John Riddoch 2008 or a Te Mata Coleraine Cabernet Merlot 2009.
Bin 389 looks a bit awkward in that company, doesn’t it? So what do we call it from now on? Not so poor man’s Grange? Post GFC Grange? Consider that you can buy St Henri for less than $70. Most of us would keep wines in this price range for special occasions. Penfolds has become just plain greedy.
When wines become luxury goods
‘A bottle of Penfolds Grange, please. That’ll be $600. Oh, and one of those, a Henschke Hill of Grace. That’s another $600. Would sir like one of these? It’s the first time it’s been made – Torbreck’s The Laird? Why not. That’ll be a further $700. A bottle, that is – one bottle of big-time Barossan shiraz.’ So begins Tony Love’s report on ‘the 2011 Penfolds Luxury and Icon release’.
http://www.taste.com.au/news+features/articles/2694/australias+most+expensive+wines
On the day of the release, at the new price of $599 a bottle, Penfolds chief winemaker Peter Gago gushed that the price would look cheap in years to come, and said something like: you’ll wish you’d bought more cases of it. Peter is described as the custodianof Grange. I suspect Max Schubert would be deeply embarrassed by the antics surrounding his creation these days. Max was a plain man of few words, and words like that would’ve made him cringe.
Peter Gago striking a pose in the Magill Cellars cellar
I can’t imagine shelling out 600 bucks for a bottle of wine, let alone going on ten grand for a case. Yet the papers are telling us that this stuff is walking out the door at grog shops across the nation. ‘Price no bar for crowds at home on Grange,’ Blair Speedy wrote in The Australian. ‘Wine retailers are bracing for a stampede of shoppers as the latest release of Australia’s most sought-after wine goes on sale …’
Those crowds must live in a different world from the one I inhabit. Gago says 600 bucks is a fair price for the new Grange, ‘the pinnacle of the Australian drinking echelon.’ Then he says the price is immaterial ‘because the world of fine wine is a completely different “beast” to the rest of the wine market… It sounds horribly condescending to say it’s more than just a wine … It’s not – it’s just a wine.’
If Peter sounds confused, I’m not surprised I’m having trouble with this. http://www.heraldsun.com.au/news/more-news/grange-expectations-for-a-new-release/story-fn7x8me2-1226047130164
Is it a bird, is it a plane? No it’s Yves St Laurent!
The 2011 Penfolds Luxury and Icon release makes more sense if we see it as a fashion parade. Grange belongs to the world of haute couture, that’s what Peter Gago is trying to tell us. In the last decade, the couturiers at Penfolds have designed several fancy new creations to keep Grange and St Henri company. This is the new line-up:
- 2006 Penfolds Grange – $599
- 2008 Penfolds Yattarna Chardonnay – $130
- 2008 Penfolds Bin 707 Cabernet Sauvignon $190
- 2008 Penfolds RWT Barossa Valley Shiraz $175
- 2008 Penfolds Magill Estate Shiraz $115
- 2007 Penfolds St Henri Shiraz RRP $90
- 2009 Penfolds Reserve Bin 09A Adelaide Hills Chardonnay RRP $90
- 2008 Penfolds Special Bin 620 Coonawarra Cabernet Shiraz RRP $1,000
- 2004 Penfolds Bin 60A Cabernet Shiraz $450 (listed at Kemenys)
As you can see, Grange is not the most expensive wine Penfolds makes anymore. The original Bin 620 was a 1966, which from memory cost about $80 in the eighties and was one of the best reds ever to cross my tongue. The best Penfolds red in my book was not the ’66 Bin 620 or any Grange I’ve drunk but the 1986 St Henri my partner and I shared on a special night last year. I bought 6 bottles of that wine in 1991 for about $25-30, and yes, I wish I’d bought cases of it. http://briard.typepad.com/kims-konfection/2010/11/grange-gets-all-the-pr-but-st-henri-is-a-corker.html . St Henri has always been the sleeper in the Penfolds pack. The current 2007 isn’t up to scratch but Dan M’s has the great 2004 for $85.
Gold Bullion
I’m very lucky to have friends who share their old Granges. Most people don’t have such friends, and most Granges aren’t shared. They’re never opened. I can’t see too many wine bars offering Grange or Bin 620 by the glass either – they’d have to charge $250 a shot for the latter. And can’t you see the punters arguing with the barman: ‘you didn’t pour me enough …’
Most Granges aren’t drunk, of course – they’re bought and kept and sold again. Guys buy these wines and stick them into temperature controlled cabinets with glass fronts to impress their guests. Most people buy Grange as an investment. Nothing wrong with that, but let’s not kid ourselves that the folks rushing the grog shops are buying Grange because it’s Australia’s top drop. The folks who buy Grange don’t know much about wine, but they know it’s as good an investment as gold bullion. That’s why Grange needs a custodian, and that’s why Penfolds popped out a new Bin 620 for a cool grand – it’ll be irresistible to investors because it’s a one-off, and it will be a rare wine down the track.
Haute couture is indeed a world far removed from the simple enjoyment of food and wine. Grange is the perfect artifact, of course, since it is the pinnacle of the blender’s craft. It’s made to a formula, and fruit is carefully sourced every year to ensure that the wine is a typical Grange. Every Grange is pretty much the same year to year. Grange will never surprise you as other wines do. Grange may be close to perfect Aussue red, but it’s boring and predictable. Don’t get excited, please: predictable is what you look for in your investments.
The real world
Those of us who buy wine for the enjoyment, to share with friends over a tasty meal and lively conversation, get far more excited by wines that surprise us. That’s the whole point of wine: the enormous variety of origin, grapes and maker, and the variations from vintage to vintage. And there are plenty of those wines to be had for around twenty dollars or less if you buy wisely (I listed quite a few reds in my previous post on the Penfolds 2012 Bin release).
However, should you find yourself seriously thinking about spending $600 on a bottle of Grange, think again because you can buy a dozen of Australia’s best wines for that money. Here’s one possible selection:
Paulett Antonia Riesling – $40 (best Riesling – JH)
Grosset Polish Hill Riesling, Clare Valley South Australia – $45 (not far behind)
Leo Buring DW J17 Leonay Riesling 2006 – $40 (a maturing classic)
Tyrrells Vat 1 2005 Semillon – $50 (another maturing classic)
Montalto The Eleven Chardonnay – $55 (Mornington Peninsula gold)
Felton Road Bannockburn Pinot Noir – $55 (a role model)
By Farr Pinot Noir Sangreal – $65 (the best Pinot made in OZ?)
Wynns John Riddoch Cabernet – $70 (another classic)
Majella Cabernet Sauvignon – $30 (one of the true bargains out there)
Dalwhinnie Moonambel Shiraz – $55 (modern classic from the Pyrenees)
Seppelt St Peters Shiraz – $50 (won the Winestate Shiraz challenge)
Teusner Avatar – $25 (my choice for a GSM – ridiculous value)
There you go – you have $20 change left out of $600 for bottle of Chandon bubbly to celebrate your good sense.
Kim
