NEWS
TWE CEO: AT LEAST 3 YEARS TO FULL RECOVERY IN CHINA POST TRADE FEUD
By Siulan Law Mathews DipWSET
15-2-2023
Source: Penfolds
Australian Treasury Wine Estates’ (TWE) CEO, Tim Ford, said a full recovery of the company’s business in China will take at least three years after the punitive tariffs have been lifted.
Speaking to Australian media after reporting a 72 percent jump in net profit to AUD188.2 million (USD130m) in first half of this financial year, he also said he will travel to China next month to reconnect with customers, local staff and business partners.
“I intend to be in there in March and am still finalising all my plans,” Ford said.
Even if the punitive tariffs are lifted today, Ford did not expect a speedy recovery in TWE’s performance in China as supply for the company’s premium wines needs time to pick up.
“For our higher end luxury wines, it would take three years because we have to go and source more grapes,” Ford said.
“So if you make it this year, you don’t sell it for another three years. It would certainly take us time to increase the makes of those wines ... because we’ve done such a good job of reallocating what was going to China a couple of years ago.”
Next month’s China visit will be Ford’s first in three years due to China’s strict Covid quarantine policy which has literally shut the border.
TWE owns the Penfolds brand which is very sought-after by Chinese consumers, the company used to sell 600,000 cases of premium wines to China before the trade blockage.
The company has circumvented China’s tariffs by creating new Penfolds labels which are made in Bordeaux, California and even China’s Ningxia wine region.
Ford said there are “plans and strategies in place” if restrictions were removed quickly, but insisted the company was sticking to business as usual.
(the writer can be contacted at: info@thewinechronicle.com)
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