NEWS
TWE SAID IT REMAINED COMMITTED TO CHINA MARKET DESPITE PUNITIVE TARIFFS
By Susan Lewis
15-10-2021
Source: Treasury Wine Estates
Chairman of Treasury Wine Estates (TWE), Paul Rayner, said the company remained committed to the Chinese market in the long term despite its effective closure to Australian wines.
In an address to shareholders, he emphasised the importance of building relations, in an attempt to call on the Australian government to do more to repair its relationship with China.
“We remain committed to the China market for the long term and continue to invest in our team, our brands and our relationships with customers and consumers,” Rayner said.
“Trust is critical to building relationships and brands and is therefore essential to our long-term success. I think this will be particularly important in the post-COVID world, as governments consider how they stimulate domestic economic recovery and the role of international trade relationships in driving economic growth,” he added.
Being owner of wine brands including Penfolds, TWE had China as a major market prior to 2019 and is one of the companies most hit by the freeze in ties with China.
Its share price is down nearly a third in the past two years although it has recovered from the lows seen in the middle of 2020.
Chief executive, Tim Ford, told shareholders that businesses in USA and Australia were not performing as well as hoped.
He said the USA market is still sluggish, where re-openings are continuing at a gradual pace, slower than the company had anticipated.
In Australia, extended lockdowns in Sydney and Melbourne have resulted in the closure of the on-premise channel, delaying TWE’s execution plans, particularly for Penfolds.
Online and e-commerce sales have somewhat filled the gap, he said, but noted that growth rates were down on last year.
TWE share price fell 5.4 per cent to AUD11.63 upon this warning.
Shareholders had previously been impressed by TWE’s resilience in the face of the pandemic and the shock from China’s punitive tariffs on Australian wines.
(the writer can be contacted at: info@thewinechronicle.com)
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