Treasury Wine Refocuses On China Business As Australian Wine Tariffs Lift

With China removing tariffs on Australian wine—which have devastated the category in the market the past few years—Treasury Wine Estates has announced a new plan to rebuild its position in the Chinese market. As soon as the tariffs expire, effective tomorrow, Treasury says it will begin to reintroduce many of its Australian wines to China, beginning with more entry-level wines from Penfolds like Penfold’s Max’s, Koonunga Hill, and One by Penfolds. In addition, Treasury will reallocate some of its higher-end Australian bottlings from other global markets to reestablish luxury Aussie wines in China. Specifically, the company will focus on Penfolds Bin and Icon wines.

Beyond Penfolds, Treasury plans to rebuild its distribution network for the Australian wines in its Treasury Premium Brands portfolio. While the company plans to swiftly re-enter the Chinese market, Treasury doesn’t expect Chinese sales to have a strong effect on FY24 performance. “Since the tariffs were introduced three and a half years ago, our commitment to China has been resolute,” said Treasury CEO Tim Ford. “This is a medium-term growth opportunity that we will pursue in a deliberate and sustainable manner, focused on growing our portfolio in China while continuing the strong momentum that we have delivered in several global markets over recent years.”

Globally, Treasury’s first half net sales for the six months through December were down 2% at constant currency to A$1.3 billion ($844m), as EBITS slipped 10% to A$290 million ($188m). Its Penfolds division contributed growth, rising 8% in sales terms and 4% in EBITS, while the Treasury Premium Brands and Treasury Americas units declined.—Shane English

Tagged : Penfolds, Treasury Wine Estates

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