By Jim Boyce | Two massive alcohol brands are partnering in China—Australian producer Treasury Wine Estates and local baijiu giant Luzhuo Laojiao. Luzhou Laojiao will exclusively distribute TWE brands like Saltram and Penfolds Bin 138 as well as get the majority quota for China of Penfolds flagship wine Grange, according to this report from Yicai Global.
TWE hopes that it can see a surging sales growth in the Chinese market by taking advantages of Luzhou Laojiao’s high-end marketing channels, Peter Dixon, the Melbourne-based wine maker’s general manager for Asia, Middle East, Africa and Global Travel Retail, told Yicai Global.
Chinese consumers face a dizzying wine landscape with tens of thousands of brands handled by thousands of distributors, many of them small, regional and inexperienced. What Luzhou Laojiao offers TWE is one of China alcohol’s top brand names, a vast distribution network, and huge marketing and promotion clout.
I’m not sure if TWE also seeks “a new chapter in the integration of Eastern and Western cultures,” as Luzhou Laojiao chairman Zhang Liang was quoted as saying by Yunjiu Media, but it no doubt hopes to leverage a trusted brand, especially given recent cases of fake wine and other intellectual property issues facing its Penfolds label.
For more on those IPR issues, see this post on sibling site Grape Wall of China.