Treasury Wines has launched its first Chinese-made Penfolds wine.
👉 Background: Treasury Wine Estate is one of the largest wine makers in the world. It owns a whole heap of brands like Wolf Blass, Lindemans, 19 Crimes and of course the crown jewel Penfolds.
👉 What happened: In 2019, Australian wine was going gangbusters - producers were selling $1.3 billion worth of wine into China.. But then, the Chinese government announced 175% tariffs on the export of wine into China.
👉 What else: Now, Treasury Wines has launched its first Chinese-made Penfolds wine called One by Penfolds... it‘s selling for around $50 and is a diffusion line for the premium brand.
💡A diffusion line is a secondary product line created by a luxury brand that aims to capture a different part of the market.
💡Luxury brands can often feel out of reach for the everyday consumer so the diffusion line allows a broader market to access the luxury goodies (think the thrill of Armani... but with Armani Exchange quality).
💡Unlike fashion brands, Penfolds’ diffusion line is created out of a necessity to crack the Chinese market without the enormous tariffs. But the risk is One by Penfolds may reduce Penfolds' overall brand value in China, which can sell for thousands of dollars a bottle.
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