Treasury Wine Estates Ltd., the world’s second-biggest listed winemaker by revenue, lifted the price of its premium 2008 Penfolds Grange vintage by 15 percent as growing Chinese demand for high-end wines outpaces supply.
The rise to a recommended retail price of A$785 ($821) a bottle will be the second for 2008 Grange in four months. It puts the 2008 vintage, on sale in May, 26 percent above the price of Grange’s 2007 output, Sandy Mayo, global brand business director for Penfolds, said in an interview.
Treasury Wine is hoping to boost sales to about 60 cities in China within five years from less than 16 at present as it tries to capitalize on Asia, its fastest-growing and highest-margin market. Treasury is allocating a larger share of its 7,000 case to 9,000 case production of the high-end wine to China, amid strong demand for a label produced in the year of the Beijing Olympics and ending in the auspicious number eight.
“For premium wine around the world, there’s an equalizing of supply and demand and particularly in premium wine,” Mayo said by phone.
Global stocks of wine declined by nearly four billion liters between 2006 and 2011 to at least a 10-year low, according to an October report by Rabobank International, reversing a glut that’s weighed on industry prices.
The recommended retail price for Grange, which sellers aren’t obliged to match, was A$625 for the 2007 vintage. For the 2008 produce it was first marked at A$685 in January.
The second price increase was applied in response to increased interest from wholesalers and consumers, Mayo said. The 2008 vintage last month scored the maximum 100 points in a review by Robert Parker’s Wine Advocate magazine.
Treasury Wine shares closed up 1.2 percent in Sydney, capping a 38 percent rise over the past year that’s outpaced the 14 percent gain in the benchmark S&P/ASX 200 index.