From Friend to Foe – Penfolds 2018 Release

Loyalties to an Aussie classic fade as brand’s quality fails to reflect its prestige pricing.

I’m out. For years I’ve been a loyal disciple to the Penfolds brand, admiring the handiwork of Peter Gago and his team of winemakers and inevitably, loving their work and singing the praises of their offerings year after year. But with the release of the Penfolds Collection 2018 came price rises of as much as 33% for wines like the Bin 128 Coonawarra Shiraz and the Bin 138 Barossa SGM whose RRP jumped from $45 to $60. For me, that’s a bridge too far. So, count me out please; I’ll sit this one out!

The Penfolds brand is an Australian icon and the flagship of the Treasury Wine Estates’ stable and has enjoyed riding the tidal wave of consumption thanks to a tsunami of Chinese demand for high profile Australian red wine in recent years. And while there’s no doubting the quality of the Penfolds product range, their attempt to single-handedly drive the CPI outside of the Australian Reserve Bank’s target range is surely stretching the rubber band to breaking point from the Australian wine consumer’s perspective!

This year, the corporates at TWE seem to think that such is the pressure on the demand side that Grange can sustain only a 6% increase from $850 to $900, but Bin 707 Cabernet is now worth $600 a bottle (a 20% increase on last year’s $500 price tag) and my favourite, the St Henri, is now $135 for the 2015 release. It’s hard to believe that the wine that many experts think was the best ever St Henri, the 2010, hit the shelves in 2014 with an $90 price tag. That’s a jump of 50% in only 4 years!

Ironically, while Penfolds set their recommended retail prices at the time of release each year, there aren’t many Penfolds products that manage to maintain their value on the secondary market. A quick flick through results from the major auction house reveals that recent Grange, RWT and Bin ranges are selling well below their pricing on release. In fact, over the last year, some auction houses have seen transactions average only about 65% of release prices. The exception are the few vintages where 99 or 100 points have been awarded – like the 2010 St Henri.

As the majors now race to clear the last of the previous vintage, consumers will benefit from discounting of the 2017 prices. I recently found the Penfolds Bin 28 Kalimna Shiraz 2015 at $39 – on the shelf of my local – which seemed far more palatable than paying the lofty $50 ask for the newly released 2016 version. It’s a multi-region blend combining fruit from the McLaren Vale, Barossa, Padthaway, Wrattonbully and Robe districts. There’s a vanilla bean nose up front but lashings of plush red fruits and stewed cherries through the middle. Ripe blueberries and licorice notes are quickly followed by sweet molasses and aribica  characters through the finale. The lines are sleek, and the finish lingers, thanks to a gentle acidity and fine tannins. I’d definitely rather have 20 of these than one bottle of Grange!

I’m sure that the Penfold bean counters are thrilled by the commercial success of the brand in China, but for me, the current ask for a bottle from the 2018 Collection is arrogance that borders on conceit, haughtiness and egotism and I’d suggest that we, as consumers keep our wallets in our pockets; and if we must add more Penfolds to the cellar, wait, and buy it on the secondary market.