It’s about bigger profits, pure and simple.
Wynnsday has come and gone, and the news that John Riddoch Cabernet is now $130 RR seems to have passed everyone by. Treasury Wine Estates, the outfit Fosters hived off before it sold its beer business to the South Africans, has ended up with Australia’s most hallowed wine brands – from Penfolds and Lindemans to Wynns and Rouge Homme. The guys running TWE understand that brands are worth money and, in the last couple of years, they’ve decided to squeeze their brands for all they’re worth.
They’ve been busy building a lucrative sub-Grange luxury portfolio in the $100 – $300 range. There’s very little competition here apart from fancy French grog, so this is not a dumb move given the work Penfolds has done to establish the brand in Asia-Pacific. The 2012 Penfolds Luxury & Icon release earlier this year included these wines
2010 Penfolds Reserve Bin A Adelaide Hills Chardonnay $95.00
2008 Penfolds St Henri Shiraz $95.00
2009 Penfolds Yattarna Chardonnay $130.00
2009 Penfolds Magill Estate Shiraz $130.00
2009 Penfolds RWT Barossa Valley Shiraz $175.00
2009 Penfolds Bin 707 Cabernet Sauvignon $250.00
2008 Penfolds Bin 169 Coonawarra Cabernet Sauvignon $250.00
Bin 169 was a new creation altogether, while the prices for the 707 and RWT were cranked up to keep the newcomer company. No doubt St Henri and Bin A will be pushed over the $100 barrier with the next release. That makes seven Penfolds premium wines in this exulted bracket, and more can be created at the drop of a cork given Penfolds’ resources.
Wynns has been given the same treatment just now. TWE’s brand managers have cranked up the price of John Riddoch and Michael to $130 (from $90 last year), and raised the Glengyle 2009 to $70 (up from $50) to fill the void. The V&A Lane reds were pushed up as well, to $60, so the new line-up looks like this:
John Riddoch Cabernet Sauvignon 2009 – $130)
Michael Shiraz 2009 – $130
Glengyle Cabernet Sauvignon 2009 – single vineyard – $70
V&A Lane Cabernet Shiraz 2010 – $60
V&A Lane Shiraz 2010 – $60
Black Label Shiraz 2010 – $40
Black Label Cabernet Sauvignon 2010 – $40
There’s only one problem with TWE’s well-manicured plans for pushing the top of the Wynns range into the luxury class: the sheer volume of wine made at Coonawarra. The vast estate has some 800ha under vines, or 2000 acres by the old measure. That’s BIG. Even though the 2009 Cabernet Sauvignon is an absolute blinder, even after a year of heavy discounting, there’s still some left in the retail channel. The RRP of the black label Cabernet may be $40, but you can buy it for $25 now, and it will come down to $20 or less. That makes it one of our super red wine bargains.
At the top of the line, John Riddoch and Michael are already discounted to less than $90. So it goes. This is the second time the owners of the Wynns brand have tried hard to push the prices for the top wines up. They tried the same caper in the nineties, at a time when this illustrious estate was showing signs of neglect. The old vines were no longer able to give their best.
At the same time, Southcorp bought Rosemount for a ludicrous amount of money. The resulting indigestion caused enormous ructions, and there was talk of a reverse takeover. John Riddoch and Michael weren’t made in the years 2000 – 2002. After that time, winemaker Sue Hodder and vineyard manager Alan Jenkins embarked on a huge project to get the vineyards and the winery back into shape. Details here: http://gourmettraveller.com.au/winemaker-of-the-year-2o1o-winners-sue-hodder-allen-jenkins-wynns-coonawarra-estate.htm
Now the guys at TWE think they can squeeze the Wynns brand for all the money it’s worth. Luxury goods more appeal, and more generous margins. We understand that.
Kim