Made in China: Treasury Wines’ new Penfolds is from Ningxia

Penfolds maker Treasury Wine Estates is planning to side-step China’s steep wine tariffs by releasing a vintage made within China itself, with the first bottles to be sold just months from now.

The ASX-listed beverages company has been experimenting with wine grapes grown from the central-north region of Ningxia and from Shangri-la, in the western province of Yunnan, which has begun to yield what the company says are “promising characteristics” in quality and flavour.

Growing grapes in China is part of Treasury’s latest efforts to circumvent China’s crippling wine tariffs and meet continued demand in that market. Treasury has already begun producing wine in Bordeaux, France, Chile and the US.

Treasury’s Shanghai-based managing director of Penfolds, Tom King, confirmed the Chinese wine would be a red blend consisting primarily of cabernet grapes.

The new collection, which will cost the equivalent of around $30-$50 a bottle, is being pitched as a more affordable wine. “This is very much our first wine, it’s still a trial wine,” he told the Herald and The Age.

But the eventual goal is to take it global. “Ultimately, as we progress on our journey, I would love to be selling Penfolds China wines to other markets around the world.”

Chief executive Tim Ford said making locally produced wine in China was a “natural next step”.

“We’re confident we can produce a premium Chinese Penfolds that maintains the distinctive Penfolds house style and uncompromising quality,” Ford said.

Beijing’s exorbitant wine tariffs of up to 200 per cent imposed in November 2020 forced Treasury Wine to reallocate its wine to the US and Asia, as well as other markets. Despite the tariffs, demand for the Penfolds brand remains strong in China and no other premium red wine brand has moved in to fill the gap.