Penfolds’ £1.2 million Christmas Present - Gago gone Gaga part 2

Looks like the $168,000 designer ampoule was just the warm-up act

The company has released a one-off Penfolds Collection - a flight of Granges from 1951 through to 2007. The Collection goes on sale at Hedonism Wines in Mayfair, London, where you can also buy the Penfolds Ampoule released back in June 2012. One of the 12 ampoules is also for sale at Sydney airport, so it looks like they weren’t exactly snapped up by eager collectors. More on that ‘compelling work of wine art’ here: http://briard.typepad.com/get_the_picture/2012/06/penfolds-168000-ampoule-gago-gone-gaga.html

Each of the Grange bottles in the Christmas Collection comes signed by either Max Schubert, John Duval or Peter Gago (today’s custodian of the Holy Grail). The £1.2 million price also covers a set of 13 magnum cases that include the rare 2004 Bin 60A and the 2008 Bin 620 special bottlings. In addition, Penfolds will throw in one case of its icon and luxury wines every year for the next ten years.

Photo courtesy of Julia Sevenitch

Upping the Ante in the Luxury Sector

Still not tempted? How about £50,000 to spend on older Penfolds wines of your choice, plus two business class tickets to Adelaide, a VIP tour and tasting at Penfolds Magill Estate, two nights’ accommodation and dinner at the Magill Estate Restaurant. Still not rearing to go? What about a set of gold-plated steak knives? Sorry, make that diamond-studded cork screws.

‘Gago believes this is probably the finest set of Penfolds wines ever to be assembled and sold,’ Decanter reports. ‘It is certainly the most expensive. In the last two or three years, the South Australian producer’s owners, Treasury Wine Estates, have been aggressively re-positioning Penfolds icon range as a global luxury brand to capitalise on opportunities in newer markets such as China.’ So why launch this collection in the UK?

Wine writer Max Allen told Decanter that 'this is either marketing genius or end-of-empire insanity.’ Max wonders why Penfolds is focusing all its attention on China and the UK, when its core strength is the admiration of generations of loyal Australians. Let’s not forget that Penfolds’ most expensive wine, the $1000 2004 Bin 60A Coonawarra Cabernet, was released in Shanghai a couple of years ago, not in Adelaide.

Trashing the Penfolds brand again

At the release of the 2006 Grange for an outrageous $600, Peter Gago said the world of fine wine was ‘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 you’re confused, you’re not alone. The irony is that TWE can push the price for Grange up all it likes – the reality is that you can buy lots of recent Granges for $400 lots of places.

Sandy Mayo, Penfolds global brands business director, told Decanter that ‘it’s about harnessing Penfolds' unique history, its tradition of craftsmanship and inventiveness to up the ante in the luxury niche sector.’

photo courtesy of Lemova

What Mayo and Gago don’t seem to understand is this: Moving a great brand out of reach of its home base is just another way of destroying it, that’s what Max Allen’s talking about. The loyalty of nouveau-riche Chinese aspirants is fickle, and the cynical attempt to rip off wealthy Poms at yuletide will do Penfolds’ reputation more harm than good. TWE is screwing its fan base at home as well, pushing up the prices for it bin reds year after year, and adding more fancy labels to the 'icon and luxury' range in the $100 to $250 bracket.

Wine becomes just another 'vacuous totem of wealth'

That’s how Decanter’s Andrew Jefford sees creations like the Penfolds $168,000 ampoule, ‘like pointlessly complicated watches, tank-sized vehicles for urban use, houses which are never lived in and boats which spend the year bobbing about on their moorings.’ Andrew says he takes no issue with market forces that make rare wine unaffordable to many drinkers, but takes exception at marketing initiatives that ‘look so obviously like the fantasy of pale people who have spent too much time locked up in a room with glossy magazines.’

He takes a swipe at Penfolds, an Aussie wine company after all: ‘They [the pale people] are hilariously alien to the great Aussie traditions of piss-taking and pretension-popping.’ And he adds the same point I made above: that turning fine wine into artificially exclusive luxury goods damages the brand. ‘No First Growth or top Burgundy domain would contemplate anything this silly; they leave that kind of ludicrous marketing excess to the bubble-brained Champenois, where form regularly eclipses content.' Read the full post here http://www.decanter.com/news/blogs/expert/530747/jefford-on-monday-wine-and-pretension

The GFC and Fosters - a little history

'We all know the feeling,’ Mike Veseth writes in his Wine Economist blog in 2008: ‘A night of bacchanalian excess followed by regrets and a light wallet the next morning. Foster’s, after a 12-year bender in which it spent A$8bn in the wineries of Australia and the US, has a severe hangover. Australia’s biggest beer and winemaker on Tuesday announced A$1.2bn of write-offs, lowered profit forecasts and the departure of its chief executive.’

Fosters had never really digested Southcorp Wines, which it grabbed for $3.5 billion in 2005. Southcorp in turn had never recovered from swallowing Rosemount for $1.5 million in 2001. The barbarians were preoccupied with giant stomach aches, while Australia rode the export wave until it crashed under a glut of wine and a surging Aussie dollar. No wonder Fosters got dumped.

For Love or Money

Treasury Wine Estates is the company Fosters hived off last year before selling its beer business to South Africans. TWE has a lot of urgent work to do restoring the great brands Southcorp and Fosters trashed in the naughties, brands like Lindemans, Leo Buring, Metala, Mildara, Rothbury, Rosemount, Rouge Homme, Saltram, Seppelt, Seaview, Tollana and Wynns. Sadly, TWE has decided that milking the Penfolds brand for more than it’s worth is the easiest way to keep the money pouring into the Treasury's coffers.

As Richard Farmer reminds us, only a couple of years before Fosters decided that wine was a distraction to its beer business, it ‘realised that selling wine was not the same as selling beer ... So what to do now? Why, let's go back to pretending that we are once again artisan winemakers. Resurrect that old bloke who invented Grange. Putting him on the billboards won't cost us anything because he's long dead.’

The campaign ran under the banner To The Renegades, which proved that Fosters wasn’t just ignorant about wine but about the English language as well. Max Schubert was a company man through and though. He might’ve been a maverick but he was no renegade. And here’s an ironic twist: the tagline for the ads was ‘To those who do things for Love not Money.'

Shabby as shabby gets

Max worked for Penfolds all his life yet Penfolds didn’t seem to appreciate his enormous contribution, as Richard Farmer reminds us: ‘The loyal servant of Penfolds had always hoped his farewell would be celebrated in that old fashioned way with a good watch. A Swiss Rolex was to be his pride and joy but he just got a Japanese Citizen, and for the rest of his life there was not even a free case of his masterpiece every vintage.’

This is staggering to read given that Max retired in 1975, just before the Penfold family sold out to Sydney brewer Tooth & Co. Max had to look elsewhere for recognition, which came years later in the form of the inaugural Maurice O'Shea Award, an Order of Australia, Decanter magazine's Man of the Year in 1988, and an Australia Day Citizen Award in 1991. He died in 1994 when Penfolds was part of Southcorp Wines.

We can only wonder what Max Schubert would think of the money-making schemes the boys at the Treasury keep launching on an unsuspecting world. He was just trying to make the best Aussie red he could, and he stuck to his guns and succeeded brilliantly.

Kim