Australia’s biggest wine group is playing the long game with the imminent launch of its Chinese-made Penfolds version.
The Chinese government imposed heavy tariffs of up to 175.6 per cent on many Australian wine producers including Treasury Wines from November 2020 which rendered it almost pointless to try to keep the export sales into China going.
from Australia which were previously exported to China to other markets, with much larger volumes of Penfolds and Wolf Blass going into Thailand, Malaysia, Singapore and Vietnam. He said while the “premiumisation tailwind” was continuing “the pace may be moderated by a rising cost of living”. Mr Kierath estimated that in 2018-19, Penfolds generated $434 million of sales in China and $141 million in other Asian countries. The China market for Penfolds at the time was three times the size.
Barrenjoey also signalled that checks of industry conditions showed there was strong demand for luxury wine across Singapore, while in Hong Kong, lockdowns and restrictions on eating out had crimped demand, although there had been a partial recovery since luxury wine sales plunged 50 per cent between February and April.MST Marquee analyst Craig Woolford has a “buy” rating on Treasury Wines and a 12-month target price of $13.70.
Wine Australia said the average winegrape purchase price decreased by 10 per cent to $630 per tonne. The average value for reds declined by 15 per cent to $707 per tonne, while the average value for whites increased by 2 per cent to $548 per tonne. The white grape average price was the highest since 2008.
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