Treasury Wine Estate Wines At Company Headquarters Ahead Of Full-Year Results
Treasury Wine Estate Wines At Company Headquarters Ahead Of Full-Year Results

Big consequence of Chinese tariffs

Penfolds owner Treasury Wine Estates (TWE) says the latest trade spat between Australia and China has put up to 30 per cent of the group's earnings in jeopardy.

In a statement to the Australian Stock Exchange on Monday, TWE said it would be redirecting its luxury wines to other key markets as a result of Chinese trade authorities slapping Australian winemakers with new import tariffs.

On November 27, the Chinese Ministry of Commerce imposed tariffs of more than 200 per cent following allegations Australian winemakers were dumping wine into the Chinese market to lower the price.

The wine industry is the latest sector to be hit by souring trade relations between Australia and China that have already impacted other agricultural and resource exporters.

TWE chief executive Tim Ford flagged the company would continue to export wine to China; however, the sanctions would cost Australian jobs across the industry.

"There is no doubt this will have a significant impact on many across the industry, costing jobs and hurting regional communities and economies which are the lifeblood of the wine sector," Mr Ford said.

"We will continue to work with our customers and partners in China to demonstrate our long-term commitment to the growing number of Chinese consumers who enjoy our brands."

In financial year 2020, exported wine to the Chinese market represented 30 per cent of TWE's total group earnings.

The company primarily ships premium wines to the major Asian economy, with luxury and masstige wines making up 63 per cent of exported volume and 91 per cent of revenue.

Approximately 39 per cent of Penfolds wine - TWE's premier brand - is sold to China.

"We will continue to work with our valued partners to further understand the implications and

how we can work with the industry, governments and others to support the sector," Mr Ford said.

"We will continue to engage with the Chinese Ministry of Commerce as the investigation proceeds to ensure our position is understood. We call for strong leadership from governments to find a pathway forward."


First step in coronial inquest into fatal bus crash begins

Premium Content First step in coronial inquest into fatal bus crash begins

Casey Brown was a passenger on the Whitsunday bus, which was not required to be...

Hydeaway Bay’s request for Anzac memorial divides council

Premium Content Hydeaway Bay’s request for Anzac memorial divides council

A verdict has been made after a community group offered to foot the bill for the...

‘Now keep the bloody border open’: Tourism boss

Premium Content ‘Now keep the bloody border open’: Tourism boss

Tourism industry labels border closure to Sydney ‘totally unnecessary’