Treasury Wine Estates will bypass big liquor store retailers Woolworths and Coles in the first phase of an Australian launch of powerhouse United Kingdom brand Blossom Hill to help reduce cannibalisation with its own bulging local portfolio of brands.
Treasury, the maker of Penfolds, Wolf Blass and Rosemount, is taking a punt that it can replicate the success of Blossom Hill, which is the No.1 selling white wine in the United Kingdom by both volume and value, and No.1 in the fast-growing rose category. Blossom Hill is also the No.2 red wine brand in the UK market.
It came into the Treasury portfolio as part of the $754 million acquisition in   October of the United States wine business of British alcoholic drinks giant Diageo. 
Treasury chief executive Mike Clarke's strategy in buying the Diageo portfolio was to get his hands on the premium Californian red wine brands which had been neglected, and he reluctantly agreed to also take the Blossom Hill brand, a UK-focused brand that was more in the "cheap and cheerful" segment.
Treasury's managing director of Australia and New Zealand, Angus McPherson, told Fairfax Media that a local version of Blossom Hill made by Australian winemakers was being deliberately sold through independent retail chains first up as part of a mid-  May launch, but it may be expanded more broadly in the future. "It's just the first phase of the launch. We're using the same model that was used in the United Kingdom," he said.
Treasury is steering clear of the big liquor chains like Dan Murphy's and BWS operated by Woolworths, and First Choice and Liquorland run by Coles.
"The strategy is make sure we see it well established in the independents first," he said.
Mr McPherson said the main focus was on the fast-growing rose segment, which is growing at 19 per cent per annum in Australia across all players.
"It's about growing the category for us," he said. Blossom Hill will be pitched at a price point of $12.99 per bottle.
He said there would be minimal cannibalisation with existing Treasury brands such as Annie's Lane, and Squealing Pig from New Zealand, in those segments.
"We see very little cannibalisation," he said.
Mr McPherson won't be specific about growth rates for the broader Treasury Wines business in Australia over the past few months but said he was content with the performance in a mature overall market.
"I'm happy with the performance of the business," he said.
Treasury wants to convert more cider drinkers in the 20-plus age group to be consumers of lighter, crisp styles in the rose and moscato segments.
Treasury shares have doubled in price to $9.98 compared with around $5 in   July, 2015, on booming demand for Penfolds and Wolf Blass in Asia.
Andrew Mitchell, portfolio manager from Ophir Asset Management, said the acquisition by Treasury of the Diageo wine business was a smart move by Mr Clarke.
"It makes both financial and strategic sense," Mr Mitchell said.
"Diageo has given Treasury Wine another avenue of growth."
Ophir, whose flagship fund delivered a return of 77.5 per cent in 2015, thinks there is even more gains the share price can make if the recipe for reinvigorating the core Treasury wine brands with extra investment and focus on the top tier, can be replicated in the United States with the Diageo stable.