Australian vintner, Treasury Wine Estates, has expressed its optimism following the announcement that China will conduct an expedited review of its tariffs on Australian wine. The ASX-listed company has outlined its plans to rebuild its China business if these tariffs are removed.
A Focus on Premium Brands
Treasury Wine Estates plans to prioritize the rebuilding of distribution for its renowned Penfolds Australian entry-level luxury brand, as well as its premium portfolios. In order to achieve this, the company intends to reallocate a portion of its Penfolds luxury and icon tiers from various global markets. Additionally, Treasury Wine Estates aims to invest in enhanced sales and marketing resources specifically catered to the Chinese market.
Seizing the Opportunity
Having previously been a crucial market for Treasury Wine Estates, the company is confident in its ability to reinstate and grow its presence in China. The imposition of hefty anti-dumping duties in 2020 had strained diplomatic relations between Australia and China, leading to significant challenges for Australian wine exporters. However, the recent decision by China to review these restrictions, coupled with the forthcoming visit of Australian Prime Minister Anthony Albanese, heralds a positive turn in the two countries’ relationship.
A Favorable Outcome
Treasury CEO Tim Ford welcomed the news, stating, “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.” He emphasized that a favorable review would not only benefit Chinese consumers and customers but would also have positive implications for the Australian wine industry as a whole.
Sustainable Growth
Treasury Wine Estates emphasizes that its plans for rebuilding in China will be implemented sustainably and without compromising the company’s long-term growth opportunities in other key markets.
