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Herbert Smith Freehills’ TMT Digital & Emerging Technologies lawyers advise Treasury Wine Estates on Issue of Non-Fungible Tokens for luxury Penfolds wine

25 November 2021 | Australia, Asia Pacific
Deals and cases

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Herbert Smith Freehills has advised Treasury Wine Estates on a very limited sale of Penfolds Magill Cellar 3 barrel of wine to the Blockbar marketplace to be traded through Non-Fungible Tokens (NFTs).

This is the first deal of this kind for Treasury Wine Estates and provides an opportunity for the global premium winemaking company to expand its products into the booming global crypto-asset market and to reach a new demographic of consumers.  

Through the deal with Blockbar, a marketplace for luxury wine and spirits products, limited edition NFTs tied to a rare Penfolds Magill Cellar 3 barrel of wine made from vintage 2021 and subsequently the wine bottles, will be minted and traded on the Blockbar blockchain platform. The wine, when bottled, will ultimately be securely stored at a climate-controlled Blockbar facility in Singapore, taking the hard work for consumers out of cellaring luxury wine.

Each of the 300 bottles will be uniquely identifiable and tethered to a unique NFT which provides the holder with the right to redeem the individual bottle. The NFTs will be traded on the Blockbar marketplace in either USD or ETH (a cryptocurrency similar to Bitcoin). Following the wine release date, holders of the NFTs can redeem the bottle corresponding to their NFT for consumption.

You can read more about this exciting initiative at: https://www.penfolds.com/en-au/about-penfolds/collaborations/blockbar.html

The core Herbert Smith Freehills team was led by Partner and Head of TMT & Digital Julian Lincoln, Digital Law Lead, Australia & Asia Susannah Wilkinson and Senior Associate Alex Lundie.  Financial services regulatory issues were covered by Partner Charlotte Henry and Special Counsel Ewan MacDonald.

While the firm’s TMT Digital & Emerging Technologies practice is always advising companies on commercial and legal issues arising at the cutting edge of the adoption of new technologies, it is nonetheless exciting to see large and established leading companies such as Treasury Wine Estates exploring new market segments and opportunities by leveraging emerging technologies like blockchain and NFTs. These new ventures require advisors who understand the technology in order to be able to identify and manage legal risks and to keep pace with the rapidly evolving regulatory landscape.

While Treasury Wine Estates may be one of the first wine companies to launch NFTs it certainly won’t be the last FMCG company to enter this emerging marketplace.  

For more information on how our global TMT & Digital Law group can help your business, please contact Julian Lincoln.

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