Major Australian wine producer, Treasury Wine Estates (TWE), has brilliantly minimised the damage caused by lost sales in China due to tariffs, by exporting more premium wines to other countries such as the US.
TWE flagship premium wines like the Penfolds label is expected to become more pricier as it seeks to reach out to more customers in the US and Asia. Wine consumption has somewhat recovered with more people drinking wine at home and in bars and restaurants, all thanks to the removal of social restrictions in many countries in the US, Europe and Asia.
Much of the Penfolds that was traditionally shipped to mainland China found its way to other parts of Asia over the course of 2022, helping to stem the loss of customers and profits generated by Chinese drinkers.
TWE Chief Executive Tim Ford said, “After 2 years of significant change, we enter 2023 with momentum.” This is reflected by the 5.3% increase in profit from previous year despite the challenges from China tariffs and higher inflation. Tim added, “We managed through the effective closure of the mainland China market, materially reshaped our Treasury Americas division and navigated a global macroeconomic backdrop that included the global pandemic, significant supply chain disruptions and inflationary cost pressures.
