1 year ago
Treasury Wine Sees Profit Rise, Cautious on China Sales Shift
Treasury Wine Estates, which makes the popular Penfolds wine, made more money this year.
However, China, where they sell a lot of wine, has made a new rule.
Officials there can't drink alcohol at official meals anymore.
This is making it harder for the company to sell wine because people might not buy as much for big parties.
Even though the company's sales went up after some taxes were removed, the new rule could still cause problems.
The company is watching how it affects sales, and plans to keep working to sell wine in China.
Treasury Wine Estates' profits rose 17% for the year.
China's ban on alcohol in official banquets is impacting sales.
Demand from China rebounded after tariffs on Australian wine were removed.
Penfolds, a Treasury brand, is monitoring the sales impact.
The company announced a A$200 million share buyback.
- Who
- Treasury Wine Estates (Penfolds) and the Chinese government.
- What
- Treasury Wine Estates' profits increased, but a Chinese ban on alcohol in official settings may impact future sales.
- Where
- The primary market is China, with company headquarters in Australia.
- When
- Treasury's profits were for the year through June, with the Chinese ban starting in May.
- Why
- The Chinese government banned alcohol at official banquets as part of a crackdown on extravagance.
Treasury Wine View
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Market Outlook
Treasury Wine View
Growth potential in Chinese market despite challenges.
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Key facts
- Company
- Treasury Wine Estates
- Profit Increase
- 17%
- Share Buyback
- A$200 million
- Key Brand
- Penfolds
- Impact
- China's ban on alcohol in official banquets
Quotes
Tim Ford
Treasury’s outgoing Chief Executive Officer
“there’s still a lot of runway”
livemint.com
“in a meaningful way”
livemint.com
Tom King
Penfolds Managing Director
“everyone in the market”
livemint.com
