Since 2020, the wine exports of the Australian company Treasury Wine Estate have slowed down significantly on the Chinese market, due to high customs duties. A crisis situation for the wine company, while China used to represent a third of its profits.
“It will take years to rebuild the Australian luxury wine market in China”, said Australian company Treasury Wine Estate last week. The Melbourne-based luxury wine company is signalling a weakened Australian wine market in China.
According to Tim Ford, Treasury’s managing director, the company’s wine sales in China will not return to pre-crisis levels, even if the high tariffs imposed in 2020 are dropped.
Treasury Wine Estate, which is the world’s largest independent wine producer, used to get a third of its profits from China. But that was before anti-dumping measures, imposing very high additional import duties, were imposed in 2020 by the Chinese on Australian wine.
Australia’s trade minister met with his Chinese counterpart in Beijing last week, seeking to end all trade barriers as part of improving diplomatic relations. And that’s while Chinese tariffs on Australian wine are still in place today.
“Treasury is closely monitoring how the Chinese and Australian governments are working to resolve the barley tariffs outside of the World Trade Organization, with the hope that the same path will be followed for wine”, Tim Ford said last Tuesday
The company has continued to invest in marketing its Penfolds luxury wine brand in China over the past three years and supporting staff there. The idea was to maintain relationships, even though Treasury Wine Estate did not turn a profit during that time.
Featured photo : © Treasury Wine Estates