China-Australia relations: will a Penfolds wine by any Chinese vineyard taste as sweet?

Treasury Wine Estates is looking to avoid China’s punitive trade tariffs by speeding up production of a made-in-China version of the popular Penfolds brand

Under new Prime Minister Anthony Albanese, Australia wants China’s trade tariffs lifted ‘as soon as possible’, as it ‘would be a great start’ in mending their frayed ties

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Treasury Wine Estates plans to roll out its first Penfolds wine produced specifically for the Chinese market in the second half of this year. Photo: Shutterstock

Published: 4:30am, 26 May 2022Updated: 10:02am, 26 May 2022

One of Australia’s oldest wine brands is accelerating production of its made-in-China offerings, with an eye on using domestic production to circumvent import tariffs that have had an outsized impact on wine exports from down under for nearly two years, according to an industry insider.

The shift comes even as observers expect the incoming Labor government to be less provocative towards Beijing while calling for China to drop its punitive tariffs that have roiled relations and hurt various Australian industries.

Treasury Wine Estates intends to roll out its first domestically produced Penfolds wine for the Chinese market in the second half of this year, the company recently announced.

It also said that it has been conducting trials using grapes from the winemaking regions of Shangri-La in southwestern Yunnan province, and the Ningxia Hui autonomous region, with the red wine costing between A$30 (US$21) and A$50 a bottle.

“Many people think about China and how to engage with China,” said Andrew Caillard, co-founder of Langton’s, Australia’s premier wine-auction house. But wine companies cannot engage with China “without giving them something”.

Meanwhile, Treasury Wine Estates have the knowledge, know-how and skills to move the production forward and make “Chinese wine in Penfolds name”, he said.

Chinese winemakers may not yet be ready to compete with the Old World grapes from France, Italy or Spain, but they are on a path toward greater global recognition.