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- Australian Government initiates a review of tariffs on Australian wine exports to China
- Treasury Wine Estates (ASX:TWE) says a removal will enable it to rebuild its presence in China
- For the past two decades, Treasury Wine Estates has maintained its relationships with Chinese customers and partners
- Plans include expanding the distribution of Penfolds and other luxury brands in the Chinese market
- Treasury Wine Estates is up 3.10 per cent, trading at $12.14 at 11:00 am AEDT
Australian global winemaking and distribution business Treasury Wine Estates (ASX:TWE) shares are on the rise this morning.
This comes in the wake of the Australian Government’s decision yesterday to expedite the review of tariffs on Australian wine exports to China.
Longstanding commitment to Chinese customers
For the past two decades, Treasury Wine Estates has maintained its relationships with Chinese customers and partners.
This dedication remained unwavering even in the face of tariffs imposed on Australian wine in November 2020.
With the potential removal of tariffs on the horizon, the winemaker is strategically positioned to reestablish its presence in China.
Key strategies ahead
The company has outlined a series of plans that will be gradually implemented to revitalise its Chinese business:
- Treasury Wine Estates will continue its multi-origin portfolio growth strategy, with a focus on Penfolds’ French, US, and Chinese portfolios.
- Distribution channels will be restored for Penfolds’ Australian entry-level luxury portfolios, including Max’s, Koonunga Hill, and One by Penfolds.
- A portion of Penfolds Luxury and Icon tiers will be redirected from other global markets to rebuild distribution in China while maintaining momentum in those markets.
- Distribution networks will be re-established for Treasury Premium Brands’ Australian priority portfolios, such as Rawson’s Retreat.
- In response to demand, Treasury Wine Estates plans to source more Penfolds Luxury and Icon tier wines, with an aging period between three to five years.
Management comment
“It’s great to see an agreement for an expedited pathway forward to allow our Australian brands and wine to be sold in the Chinese market,” Treasury Wines Estates CEO Tim Ford said.
This collaborative effort between the Australian and Chinese governments holds the promise of a brighter future for Australian winemakers in the Chinese market, provided the review leads to the removal of tariffs.
Treasury Wine Estates was up 3.10 per cent, trading at $12.14 at 11:00 am AEDT.
