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News that the Chinese tariffs on wine may be dropped soon.
There's a fear that market will never be the same.News that the Chinese tariffs on wine may be dropped soon.
Anthony Albanese scheduled to travel to China from Nov. 4 to 7 to meet with President Xi Jinping & Premier Li Qiang in a bid to stabilise trade relations and discuss potential removal of Chinese tariffs on wine.News that the Chinese tariffs on wine may be dropped soon.
Heard one of his ministers today arguing this strongly and being very critical of China. The Albanese government has been slowly winning. Lobsters also are a problem.Anthony Albanese scheduled to travel to China from Nov. 4 to 7 to meet with President Xi Jinping & Premier Li Qiang in a bid to stabilise trade relations and discuss potential removal of Chinese tariffs on wine.
US lawyer turned winemaker suing Treasury Wine Estates over its 19 Crimes Dracula wine
A Hollywood attorney who has a ‘side hustle’ of producing and selling vampire-themed wine is suing the makers of Penfolds wine, Treasury Wine Estates, for its Halloween red wine featuring the image of Dracula.
Treasury Wine has earned the ire of lawyer and winemaker Michael Machat and landed itself in the central district court of California for its 19 Crimes Dracula red blend, with Mr Machat claiming in court documents the Australian winemaker “unjustly enriched” itself through the unauthorised use of his trademarks covering the mythical blood sucker.
The Penfolds winemaker has been accused of knowingly producing its Dracula-themed wine even though someone else owned the trademark, but relied upon its market power and resources to pay attorneys to “fight this out in court while they cash in unlawfully” on the wine.
Lawyer turned winemaker Mr Machat claims Treasury Wine’s 19 Crimes Dracula wine infringed his trademarks and when sold through bottle shops, bars and online were likely to “cause confusion, mistake, and to deceive the public at large”.
The 19 Crimes label has been a juggernaut success for Treasury Wine, whose large wine portfolio includes Penfolds, Wolf Blass and Lindemans, with the 19 Crimes label beginning its marketing life featuring 19th century convicts banished to the Australian prison colonies and more recently doing branding deals with celebrity criminals like Martha Stewart and Snoop Dogg.
Its Halloween launch featured a Dracula red blend and a Frankenstein cabernet, and Mr Machat is demanding extensive penalties from Treasury Wine including at least $US15 for every bottle of the infringing wine sold in the US, plus treble damages, and as much as $36 per bottle of 19 Crimes Dracula sold in bars and restaurants.
The court documents claim Treasury Wine sold its infringing Dracula red blend for $US18 a bottle and earned around $US15 profit from each bottle it sold on its website and $US5 per bottle earnings for wine sold through retailers.
A successful lawyer who is also one of the few private attorneys to argue a case before the US Supreme Court and win, Mr Machat has launched similar cases in the US against companies such as chocolate giant Hershey’s and restaurant chains Taco Bell and Applebee’s on behalf of his company Vampire Family Brands.
Mr Machat sold his first batch of Vampire wine called “Sip the Blood of the Vine” in 1988 to promote an album by shock rocker Alice Cooper and he is married to former 1980s British singer and model Lisa Dominique.
Together they run the Vampire Vineyards wine business with a large portfolio of Vampire-themed wine, spirits, coffee and chocolate. Vampire Vineyards first sourced its grapes in Algeria, then Italy and for around 10 years was able to source grapes from Transylvania, the legendary home of Dracula, and now sources its wine in California from Paso Robles to the Napa Valley.
He runs his firm Machat & Associates on Sunset Boulevard, West Hollywood and is the son of Martin Machat, a famous lawyer who represented black entertainers and singers established white law firms refused to work with.
His clients included middle weight boxer Sugar Ray Robinson, singers James Brown, Dinah Washington, Clyde Otis and Sam Cooke, and later worked for English artists, negotiating contracts for The Kinks, Herman’s Hermits, the Rolling Stones, The Who, Genesis, Peter Gabriel, Phil Collins, and US artists The Platters, The Four Seasons, Sly & The Family Stone as well as singer and poet, Leonard Cohen.
Mr Machat has shown a history of strongly defending his Vampire and Dracula trademarks which cover beverages such as wine, spirits, sangria and coffee, as well as chocolate and burgers.
His Vampire wines have become successful, and popular, featuring in the Blade films (starring Wesley Snipes) and HBO’s True Blood Series as well as shown on various national television shows in the US, such as The View, Anderson Cooper, CNN and MTV. They have also won numerous wine awards.
Now he has Treasury Wine in his sights.
In court documents lodged with the Californian court, Mr Machat claims Treasury Wine is liable for the damages caused to the plaintiff, his Vampire Vineyards business, as a result of the “illegal promotion, advertisement, offer for sale and/or sale of the accused products (wine) by its downstream retailers”.
“Defendants (Treasury Wine) have been unjustly enriched, among other things, by the receipt of sales revenues from consumers who mistakenly thought that they were purchasing plaintiff’s Dracula or Vampire goods and/or goods sponsored by plaintiff, but instead were purchasing defendants’ goods which are promoted and sold through advertisements that affirmatively misrepresent, either directly or by implication, the nature, characteristics, identity, and source or sponsorship of the goods.”
Mr Machat argues Treasury Wine acted with the unlawful purpose of improperly taking advantage of the valuable goodwill belonging to his Vampire Vineyards, soliciting his customers and potential customers, and attempting to sell wine goods marketed under the Dracula and Vampire trademarks.
“Defendants (Treasury Wine) knew of plaintiff’s prior existing and trademarked Vampire family of brands, and wilfully decided to infringe upon plaintiff’s trademarks because they are the largest premium wine company in the world and have the money to pay attorneys to fight this out in court while they cash in unlawfully exploiting plaintiff’s trademarks for a Halloween promotion designed to benefit defendants and harm plaintiff.”
Mr Machat argues his and the 19 Crimes wine are both sold online to the same consumers and to the same distributors and retailers, leading to further confusion among consumers.
Mr Machat was unavailable for comment when contacted by The Australian.
A spokeswoman for Treasury Wine said: “Treasury Wine Estates treats the intellectual property rights of others with the utmost respect. We stand by the integrity of our brands but we cannot make any further comments regarding this case while it remains pending.”
The case is continuing.
ELI GREENBLAT SENIOR BUSINESS REPORTER
an interesting questionI have always liked TWE but luckily never invested because my attention came when they were at their peak, and then China high tariffs hit. Instead, I became a member of their Penfolds sales club and purchase a few of their offerings. Saying that, in the past several months there has been a huge push to sell Penfolds at nice discounts.
Is this a sign of a change in direction that shows an increase in sales and profits, or desperation to maintain sales?
Goes to show that it is easy to stuff up, doesn't matter how much money you have and how many legal advisors.
The Penfolds winemaker has been accused of knowingly producing its Dracula-themed wine even though someone else owned the trademark, but relied upon its market power and resources to pay attorneys to “fight this out in court while they cash in unlawfully” on the wine.
TWE had been detected in personal scans for a potential bullish move recently with a bounce off support levels established towards the end of November at the $10.21 level. This company has recently undergone a capital raising which resulted in a fairly significant decline in the share price, as you can see in the chart below. As can also be seen, the DMI appears to be expressing decreasing bearish tendencies whilst the RSI is increasing in strength.
Stop loss for the trade would be:
(i) below the support level from the open of 18th January (i.e.: below $10.14),
(ii) below the support level from the open of 12th January (i.e.: below $10.08), or
(iii) below the recent lows of the channel from the 10th January (i.e.: below $9.98), depending on risk tolerance.
View attachment 169841
Initial discussion of trade:
Latest discussion of trade:
Australian wine exports slide 2pc in 2023
Cost of living pressures have forced drinkers from New York to London to spend less on Australian wine to also pick up cheaper bottles of wine when they visit a bottle shop or restaurant, with the nation’s wine exports slipping 2 per cent in 2023.
There is also a growing trend of sobriety among western consumers, as latest research indicated a significant negative shift in spending on all alcoholic beverages, with all regions except Asia trending negative.
In Europe – which holds some of Australia’s largest and most import wine export markets – 15 regions saw a decline in the value of wine bought from Australia as a combination of a slowing economy, higher inflation and supply chain issues resulted in sales. It was a similar story in North America, where in the US and Canada wine exports slumped 7 per cent and 24 per cent respectively.
However, Asia provided a ray of hope for Australian winemakers where sales in Hong Kong boomed, up by 74 per cent in terms of value, while sales into Singapore were up by 1 per cent. Australian wine is still locked out of the Chinese market thanks to crippling tariffs imposed on Australian imports in November 2021, and there has always been a growing suspicion that keen Chinese drinkers could be sourcing their favourite Australian wine through Hong Kong.
But more generally, the Australian wine industry continues to face maturing markets in Europe and North America amid a global alcohol market that is softening.
Latest data released by Wine Australia has reported that Australian wine exports declined by 2 per cent in value to $1.9bn and 3 per cent in volume to 607m litres in the 12 months to December 2023.
Although these export numbers are an improvement on those reported in the September 2023 export report, the results were still well below long-term averages.
Wine Australia manager, market insights, Peter Bailey said that Europe and North America drove the reduction in Australia’s export value over calendar 2023, declining by 7 and 12 per cent respectively.
“In Europe, exports to the top 15 markets declined in value as the region suffers through higher inflation rates than North America and Asia, as well as supply chain issues. This includes the UK, Australia’s largest export market by volume. Pleasingly, Australia’s exports to the UK grew in volume for the first time since mid-2021,” Mr Bailey said.
“Both the US and Canada contributed to North America’s decline in value.
The decline in exports to Europe and North America resulted in their share of export value dropping to 29 and 27 per cent, respectively.
Australian wine exports to New Zealand fell by 2 per cent in volume, and down 7 per cent by volume in Germany.
Countering this decline was a better performance in Asia, where that region’s share of export value has grown to 37 per cent.
“Hong Kong and Singapore were stand out destinations for Australian wine in Asia, driving the growth of value to the region,” Mr Bailey said.
“Further, the number of exporters to Hong Kong also grew – up 138 export businesses to a total of 531 in 2023. Hong Kong and Singapore are key trading hubs in the Asian region and, as such, some of the wine is on-shipped to other markets,” Mr. Bailey said.
The big hope for Australian winemakers is now that the Chinese government will soon lift its tariffs on imported Australian wine, with some of those tariffs set at more than 200 per cent to make it almost impossible to sell wine into China. This has allowed Australia’s biggest rivals such as winemakers from Italy, France and South America to grab market share and win over Chinese drinkers who have been mostly unable to get their hands on Australian wine.
Late last year, there were hopes a deal could soon be done on the tariffs, with China’s Commerce Ministry in September suggesting Beijing was willing to “meet the Australian side halfway” to broker an end to the punishing tariffs.
Expected positive announcement by China expected March.given TWE is facing a restrictive Chinese market and an illusionary US/EU economy maybe they are hedging their bets are trying to grab extra local ( OZ and NZ ) market share
Grape overproduction and cost of living squeezing the wine sector
Darren De Bortoli, head of one of Australia’s largest family-owned winemakers, says inland wine regions are in the worst shape he has seen in his 40 years of winemaking, as economic pressures and grape overproduction threaten the viability of producers.
Inland wine growing regions such as the Riverina in NSW, Riverland in South Australia and Victoria’s Sunraysia were particularly struggling under the weight of a grape glut, which was forcing down prices.
And, while visitors to Mr De Bortoli’s family’s cellar doors and restaurants in the Yarra Valley, Riverina and the Hunter Valley are still flowing, they are spending less on food and leaving with significantly fewer bottles of wine as cost-of-living pressures drain household disposable incomes.
However, a silver lining for the De Bortoli wine group – founded by northern Italian immigrants Vittorio and Giuseppina De Bortoli in 1928 – is the huge demand for its range of lighter-style and Italian wines coming out of Victoria’s King Valley and Yarra Valley, with the winemaker’s prosecco and rose sales increasing at double-digit growth rates.
Some of this success was boosted by the launch of a range of wines in partnership with pop star Kylie Minogue, which included a Yarra Valley pinot that won a number of wine awards.
In 2022 Minogue, through the association with De Bortoli, created a chardonnay and pinot noir made in collaboration with De Bortoli Yarra Valley winemakers Steve Webber and Leanne De Bortoli.
But elsewhere the trading and agricultural landscape remains tough.
Mr De Bortoli said inland winegrowing regions were facing tough conditions.
“In terms of those traditional inland areas, yes,” he told The Australian.
“So the Riverina, Riverland and Sunraysia, those traditional areas that seem to be struggling a bit … and I think for the inland particularly, it’s the oversupply, with the reds especially.
“The industry is in a really tough space and it is the toughest I have seen in my 40 years.”
De Bortoli chief winemaker Steve Webber. Picture: Aaron Francis
And Mr De Bortoli doesn’t expect those depressed conditions to improve much over the next year, with the only key source of optimism being a weak Australian dollar, which is helping to support wine exports as well as a possible reopening soon of the Chinese market to Australian wine if punishing tariffs are dismantled.
Latest accounts for De Bortoli show a slight rise in annual sales to $159.86m for 2023, up from $149.79m in 2022, with its losses more than doubling to $9.33m.
The majority of its sales ($130m) were in Australia, while there was a strong uplift in sales to Europe which almost tripled in 2023 to $16.67m. This was countered by slowing exports to the US and British markets.
The accounts show a large leap in costs of goods sold as well as marketing expenses, which combined rose around $16m, and helped contribute to the larger operating loss for the year.
Mr De Bortoli said there were some green shoots of drinkers spending more on wine, but it was still a challenging retail landscape for wine producers.
“We saw the initial buoyancy from getting out of Covid and now we are seeing consumers tighten up again, and from where the economy is heading we are seeing conditions are getting a bit tighter and certainly seeing that in our cellar doors and restaurants,” Mr De Bortoli said.
“Definitely the feedback is the consumer is spending less, as you’d expect in the current economic conditions.”
The De Bortoli Wines estate in Victoria’s Yarra Valley.
Mr De Bortoli is holding out hope for the reopening of the Chinese market, with Beijing officials reviewing the 200 per cent-plus tariffs slapped on Australian wine from November 2020.
“China is the big one, if China opens up we might see some normality,” he said.
For De Bortoli, it is finding some shelter from the industry storm from its highly successful push into prosecco and Rosé. According to De Bortoli’s latest annual report, sales of King Valley prosecco and rose were up 29.4 per cent and 36.5 per cent respectively in 2023. In 2022 its prosecco and rose brands posted 11.2 per cent and 26.24 per cent growth, respectively.
The release of its Italian fiano wine, called “Ti Amo”, and a portfolio of reds from Heathcote in Victoria were also proving popular with consumers.
“There is strong demand for King Valley and Yarra Valley as regions. Certainly rose has been strong for a while, prosecco too. I think it is the fashion at the moment,” Mr De Bortoli said.
Consolidation on the cards for wine sector
The trend of consolidation across various industries is set to continue and one that appears inevitable is the wine industry following the recapitalisation of Accolade Wines.
Bain Capital finalised its recapitalisation in recent weeks with its backers of the wine producer that has been the victim of having too much debt.
It sees its owner, The Carlyle Group, now out of its investment and Australian Wine Holdco Limited (AWL) the new owner of Accolade.
AWL comprises Bain Capital, Intermediate Capital Group, Capital Four, Sona Asset Management and Terry Asset Management.
It’s logical that the industry has to consolidate further, but some think one option that could be assessed over time is a back door listing, similar to the Chemist Warehouse back door listing for Sigma Pharmaceuticals.
A couple of possibilities is that Accolade Wines could be back door listed into Australian Vintage, which itself is considering a sale.
However, the challenge with this is that a number of shareholders of Australian Vintage are keen to exit the sector and are pushing for a sale, so will not want to double down.
Then there’s the question as to what happens with Treasury Wine Estates after buying DAOU Vineyards in the United States.
Treasury has a number of assets that are non core, and if it can split those from the stronger performing part of the business you could merge the rump of Treasury with other wine assets on the market.
Pernod Ricard also has assets for sale in Australia that could form part of the equation.
Market sources say that plenty of private equity firms have been looking at the space, but the cost of debt is still too expensive to make a transaction stack up.
Accolade is one of the largest wine companies in the world, producing brands such as Hardys, St Hallett and Grant Burge and its operations span the entire spectrum of grape to glass.
Hurting the industry has been the lagging price for grapes, currently at $357 a tonne, according to Wine Australia, down 11.5 per cent on the previous corresponding year.
For grapes grown in southern NSW and parts of South Australia, they could be even lower.
While many are pinning their hopes on the reopening of the Australian wine market to China in March, many believe this is overbaked.
Good morning
Published via New Corp media today (13/03/24):
The Australian wine industry is one step closer to reclaiming access to the China market and more than $1bn in annual sales after the Chinese Ministry of Commerce released an interim draft determination that proposed a lifting of crippling tariffs on Australian wine imports.
The largest exporter of Australian wine, ASX-listed Treasury Wine Estates, whose labels include Penfolds, Pepperjack and Wolf Blass, said on Tuesday night it had been advised of the draft determination.
It noted it was not a final determination and was “subject to change” by the ministry.
China introduced tariffs of up to 200 per cent on imports of Australian wine in 2021, a move widely seen as part of a range of trade sanctions against Australia in the wake of political tensions with the Morrison government.
The tariffs decimated the $1.2bn wine trade to China and forced many winemakers to look elsewhere as the largest global market was shut down.
Have a very nice day, today.
Kind regards
rcw1
would still help twe tremendously so I expect a share jump..until the next dramaIt will take a decade to trust China again.
The biggest positive for TWE is that they have kept a foot in the market by exporting their products from Europe and the UAS into China, as well as helping China develop their own wine industry while setting up and distributing a China Penfolds Vinyard and winery.
Bookpurnong Rd Salena Estate’s huge glut, debts revealed as white knight sought
Administrators are looking to sell down a five million litre glut of bulk wine held by embattled Riverland producer Salena Estate ahead of a public sale campaign for the business.
Westpac is the main-secured creditor, owed close to $20m following the company’s collapse last month, while unsecured creditors, including close to 20 local growers, have been left $4m out of pocket.
Minutes from the first creditors’ meeting held earlier this month reveal about five million litres of bulk wine was left unsold at the winery at the time administrators were called in.
The stock was valued earlier this month, but administrators Tim Mableson and Ryan Eagle from KPMG declined to comment on the valuation.
Creditors were told at the meeting that a formal sale process for the business and its assets, including two vineyard properties in the Riverland, would commence following completion of the current vintage, in early to mid-April.
It is hoped a potential breakthrough in the long-running trade dispute with China could fuel renewed interest in the assets following a failed sale campaign last year.
A decision on whether China will lift the tariffs it imposed on Australian wine in 2021 is expected within days, after the Chinese Ministry of Commerce last week released a draft recommendation to remove the tariffs.
Salena Estate on Bookpurnong Rd. Picture: Supplied
China’s foreign minister Wang Yi is currently in Australia, with trade tensions between the two countries expected to be a major topic of discussion.
Mr Mableson said he was expecting “strong interest” in the Salena Estate sale.
“The potential relaxation of the tariffs with China is expected to generate positive sentiment in the industry and in winery and vineyard assets of the type being offered for sale in the Salena Estate Wines administration,” he said.
Salena Estate directors, Bob and Sylvia Franchitto, are also considering a deed of company arrangement proposal, which would be considered alongside the business sale process.
Westpac is providing the funding needed for administrators to continue to trade the business through the current vintage and undertake a sale campaign.
Salena Estate, established by the Franchitto family in 1998, produces around 10,000 tonnes of predominantly red wine annually – making it one of the country’s largest organic wineries – selling the majority into export markets across Asia, the US and Europe.
China was previously a major customer before the tariffs were imposed.
Administrators have taken control of most of the Salena group entities, including the main trading company Salena Estate Wines, as well as related companies that run the vineyards and manage the group’s bulk wine exports.
Another related company, B & S Franchitto, owns the group’s two properties in Bookpurnong and Lyrup, and is currently in the hands of receivers Andrew Heard and Anthony Phillips from Heard Phillips Lieberenz.
According to the minutes of the creditors’ meeting, the group’s assets will be marketed to potential buyers as a whole, with buyers given the option of bidding for individual assets separately “if that resulted in a better outcome for stakeholders”.
Colliers Agribusiness was appointed to sell the business and properties in April last year, but a buyer could not be found.
The company’s 191.5ha of vineyards at the main site at Bookpurnong, between Loxton and Berri, and at a second property at Lyrup, just outside Berri, include Shiraz, Cabernet Sauvignon, Sangiovese, Petit Verdot and Chardonnay plantings, with 121.4ha certified organic.
Salena Estate sources fruit from its own vineyards as well as from growers in the Riverland region. Close to 20 growers are owed around $450,000.
Salena Estate’s business and vineyards will be put on the market once the current vintage is completed.
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