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Bought yesterday, got smoked a little today. Way off my stop currently. Will hold until the system says otherwise.
Bought yesterday, got smoked a little today. Way off my stop currently. Will hold until the system says otherwise.I hope some ASF members avoided getting hit by China's latest political salvo that has sent TWE shares plunging.
This now seems to have blown up with the share price down 11.25% today and the company's shares placed in a trading halt.TWE exec's being very diplomatic but they must be seething as China continues to play games with the Aust wine industry.
The Chinese Government has announced it will place tariffs on all Australian wine imports from tomorrow, striking a blow to the $1.2 billion-a-year industry.
The deposits, which effectively work like tariffs, will range from between 107 per cent to more than 200 per cent.
I bought yesterday of courseThis now seems to have blown up with the share price down 11.25% today and the company's shares placed in a trading halt.
This now seems to have blown up with the share price down 11.25% today and the company's shares placed in a trading halt.
https://www.abc.net.au/news/2020-11-27/china-puts-tariffs-on-australian-wine-trade-tensions/12886700
Anyone have thoughts on what the company's shares ought really be worth given the circumstances? I'm thinking that China isn't their only market presumably?
@galumay I reckon the whole night research will bring down TWE to normalcy.I have no idea @Miner, its not a business I have ever had any interest in, but a quick look at its metrics and its not a business I would pay $10 for, I dont have explanations for much of what goes on in the current market, but being up nearly 20% on those results is batshit crazy!
Given my lack of knowledge it will probably be up another 20% tomorrow!!
stumble with China; then let's make it in the US
and indeed it has.The 19 Crimes brand, which is heavily linked in its marketing with American rapper Snoop Dogg, has been a star performer for Treasury Wines. A new 19 Crimes Cali Red and Cali Rose which features Snoop Dogg’s face on the label brought a flood of new buyers.
Looking to the current financial year, Mr Ford said the company would continue its focus outside of China and warned that costs would remain elevated due to the higher costs of last year’s premium vintages. Mr Ford said that short-term impacts of COVID remained uncertain for the company with areas such as travel retail remained severely impacted by the pandemic.
Treasury uncorks top shelf Barossa wine plant
Australia’s largest listed wine company Treasury Wine Estates has unveiled its new $165 million production facility in the Barossa, which it claims to be the “largest premium winemaking site in the Southern Hemisphere”.
TWE, which produces several leading South Australian wine brands including Penfolds, Wolf Blass, Wynns and Pepperjack, says the state-of-the-art wine production facility in Nuriootpa has the capacity to produce more than 100 million litres of wine every year.
The site is adjacent to TWE’s Wolf Blass Visitor Centre and also houses the company’s largest bottling operation, packaging up to 216 million bottles per year, operating four bottling lines, and exporting to more than 70 countries.
Announced in 2019, the expansion of the Wolf Blass Bilyara site has increased the company’s premium winemaking capacity by one-third and expands TWE’s storage capacity.
Unveiled this morning, the upgrade also includes another production line, processing infrastructure and additional barrel storage facilities.
TWE says the site now employs about 400 permanent team members and up to 600 during peak vintage periods.
In February, the company reported a half-year profit of $109 million despite a 10 per cent dip in earnings.
However, TWE’s premiumisation push allowed it to increase its net sales revenue per case by 16 per cent to $95.60. More than 80 per cent of revenue is now generated by its premium and luxury portfolios.
The company was subject to China tariffs of 175.6 per cent slapped on its wine in late November 2020, which are in place for at least another four years.
This prompted TWE to split the company into three divisions – Penfolds, Treasury Premium Brands and Treasury Americas from July 1.
TWE Chief Supply Officer Kerrin Petty said the new facility demonstrated the leading premium wine company’s commitment to South Australia and its continued focus on innovation in the wine sector.
“It’s a proud moment to unveil our new Barossa wine production facility, which has been two and a half years in the making through the challenges of the pandemic,” he said.
“The new site is purpose-built for premium winemaking with the flexibility to scale up or down production depending on demand, which is crucial given the ebbs and flows of wine production.”
It site also includes a 4500 sq m Icon Cellar Building to showcase “global best practice for luxury winemaking” and provides visitors with VIP experiences and winemaking tours.
Petty said the project moved the company closer to its environmental goals.
“As our first step toward our target of being powered 100 per cent by renewable energy by 2024, we are installing solar panels to offset 22 per cent of the site’s energy consumption from the grid,” he said.
“We have also installed a purpose-built 254 megalitre dam to store treated water waste in winter and irrigate our vineyards in summer.”
The production boost follows a conscious move by TWE to shift its focus from China to the United States.
In November, TWE announced a deal to buy luxury Californian wine business Frank Family Vineyards for $432 million as part of its renewed premium focus in the United States.
The company has also expanded global sales of its 19 Crimes brand, a favourite in North America, to more than five million 9-litre cases a year.
It also last year divested several US brands, which generated cash proceeds of about $300 million.
TWE’s share price was up slightly this morning to $11.08, giving it a market capitalisation of about $8 billion.
Treasury uncorks top shelf Barossa wine plant - InDaily
Australia’s largest listed wine company Treasury Wine Estates has unveiled its new $165 million production facility in the Barossa, which it claims to be the “largest premium winemaking site in the Southern Hemisphere”.indaily.com.au
China was once a billion dollar market for Australian wine, now it is a market the same size as Sweden
The mainland Chinese market, once a goldmine for Australian winemakers as local drinkers filled their glasses and banquet tables with more than $1bn a year in Australian wine, has been crushed to become just a tiddler $25m market following years of political tensions and punishing trade tariffs.
Year on year exports to China last financial year have collapsed by nearly 96 per cent to $24.6m – ranking it about the same size in terms of Australian wine consumed as Sweden and only slightly more than the Muslim nation of the United Arab Emirates.
The latest export figures released by Wine Australia have revealed that in the wake of tariffs slapped on Australian wine by Beijing in late 2020 of as much as 218 per cent the China market has gone from Australia’s biggest wine export destination to one of its smallest that now only buys 1 per cent of wine exports.
The average value of Australian wine sold into China now has also collapsed by 65 per cent to an average of $4.09 per litre, to totally destroy a once buoyant market that could devour as much Penfolds Grange and other luxury premium wines Australian winemakers could send off to the Asian giant.
Australian wine had enjoyed the most sought after status in China for years. In 2014, South Australia’s Chateau Tanunda scored a major coup when Chinese President Xi Jinping and then US President Barack Obama were photographed at the G20 meeting in Brisbane drinking a glass of its award-winning wines.
It was only just before Covid-19 emerged that Australia hit $1.1bn of wine sold into China and Chinese drinkers made Australian wine their favourite drop, displacing wines from France as the country’s most sought after wine.
But the damage has been done by the tariffs, introduced in late 2020, that made it almost impossible for Australian winemakers to remain competitive in China and came as tensions between Beijing and Canberra escalated which also saw Australian coal, seafood, timber and other commodities singled out for tariffs or import bans.
The collapse of the Chinese market has dragged down total exports. According to Wine Australia’s latest export data Australian wine exports declined by 10 per cent in volume to 625m litres and 19 per cent in value to $2.08bn in the year ended June 30, 2022.
The decline in volume and value was not unexpected, as it was largely the result of the continued impact of the significant reduction in exports to mainland China, driven by high deposit tariffs imposed in November 2020. This is expected to remain a significant influence on the moving annual total data of Australian wine exports until late 2022.
Wine Australia manager for market Insights, Peter Bailey, said that while the total data showed declines, there were some encouraging signs in key and emerging markets.
“When mainland China is excluded from the data, exports increased by 5 per cent in value to $2.06bn, an increase of $105m – the highest value since 2009–2010.
“This is despite volume declining by 3 per cent to 619m litres. The value growth for these markets was driven by a 9 per cent increase in average value to $3.32 FOB per litre,” he said.
“The key contributors to the value growth included Singapore, the US, Malaysia, Thailand, India and New Zealand.”
Red wine accounted for 92 per cent of the value of exports at $10 or more per litre.
“This is critical as the reduction in exports to mainland China was predominantly still red wine. Off much smaller bases, still white wine and rosé also grew strongly in this price segment,” Mr Bailey said.
The top five markets in terms of value for exported Australian wine were the US, up 9 per cent to $436m, Britain, down 10 per cent to $421m, Canada, down 5 per cent to $174m, Hong Kong, down 9 per cent to $170m and Singapore, up 49 per cent to $169m.
ELI GREENBLAT SENIOR BUSINESS REPORTER
Treasury Wine Estates scores rare victory in Chinese court against Rush Rich over Penfolds copycat
Treasury Wine Estates has received a landmark win in the Supreme People’s Court of China against Chinese-Australian company Rush Rich which it alleges has been copycatting its Penfolds wine in China.
After a long standing battle in courts in Australia and China, TWE announced on Wednesday that China’s highest court had found the registration of the Chinese characters by Rush Rich was invalid.
The characters it has been trying to register for its wine use the words for “Ben Fu” which sounds similar to Penfolds in Chinese.
Rush Rich has been moving to register trademarks which are similar to a large number of luxury brands selling in China including Penfolds and car company Bentley.
“The decision was made on the grounds of bad faith and Rush Rich’s illicit conduct in registering a large amount of trademarks for a range of renowned global luxury brands including Penfolds and Bentley,” TWE said in a statement on Wednesday.
Penfolds managing director Tom King who is based in Shanghai, said the judgement “highlighted China’s unwavering commitment to protecting intellectual property rights.”
“We welcome the judgement by the Supreme People’s Court of China and thank the Chinese authorities for their continued support in protecting the rights of luxury brand operators,” he said.
“Penfolds has a long and proud heritage in China that’s been protected and nurtured since the first bottle of wine was exported from South Australia to Shanghai in 1893.”
“Our long term commitment to China, together with international legal protections to prevent infringement of our trademarks, gives our consumers the confidence to continue to enjoy award-winning quality wine from the Penfolds collection.”
The judgement comes after six years of litigation and enforcement against the Rush Rich group of companies in China and Australia which TWE alleges was attempting to exploit the Penfolds brand.
The upmarket Penfolds brand has been regularly subject to fakes and copycatting in China with operators using labels similar to that it uses on Penfolds bottles.
Once the largest exporter of wine from Australia, TWE was hit by moves by the Chinese government to impose tariffs of more than 200 per cent on Australian wine imports in March 2021 in the wake of increasing political tension between China and Australia.
But the company has remained committed to the China market, particularly for its upmarket Penfolds brand, revamping its strategy to sell Penfolds wine made in the US and France into China.
Anna Olsen, TWE’s global director of intellectual property, said the company would “spare no effort” to protect its brands and would pursue its rights “to the highest courts where necessary.”
“This case shows we wont tolerate attempts to exploit and infringe intellectual property rights and the reputation of brands in the Treasury Wine Estates’ portfolio,” she said.
GLENDA KORPORAAL
ASSOCIATE EDITOR (BUSINESS)
Penfolds’ Chinese made wine hits shelves
The luxury drinks group may consider exporting its new Chinese made wine in the future as it expands its foothold in the fledgling Chinese wine industry.
Penfolds could consider exporting its Chinese made wine in the future as it expands its foothold in the fledgling Chinese wine industry, according to its Shanghai-based chief executive Tom King.
In an interview with The Australian, on the launch of its first Chinese made wine, Mr King said Chinese made wine had the potential to become one of the company’s export brands.
“We are strong believers in the potential for the Chinese wine industry, and we would like to take an active role in its development,” he said.
“We have seen a real increase in the quality of the wine being produced in China in recent years.”
“Our ambition is to be selling Penfolds’ China wine in other markets around the world and bringing the experience of Chinese wine to consumers on a global basis.”
Penfolds boss Tom King Mr King said Chinese made wine had the potential to become one of the company’s export brands.
Mr King said global wine houses were already producing premium wines made in China, such as LVMH’s Ao Yun and Chateau Lafite’s Long Dai, which were “earning global acclaim.”
TWE, which owns Penfolds, has had a long focus on the potential of the Chinese wine market, which is set to become the world’s second largest by 2023, with an estimated 52 million regular wine drinkers.
Chinese drinkers consumed more than a billion litres of wine last year, making it the 7th leading wine consumer worldwide.
TWE was the largest single offshore supplier of wine to China until it was hit by steep tariffs imposed by China on Australian wine in November 2020, a move which reflected increasing political tensions between the two countries.
This has seen the company step up its focus on wine making in other regions, including France, the US and now China.
Mr King said demand for Penfolds wine in China has continued to be strong despite the slowdown in the Chinese economy.
The cession of export of bottled wine from Australia has prompted the company to export Penfolds’ wine made in California and France into the Chinese market.
Its pitch for the Chinese market is being underwritten by a strong support for the development of the local Chinese wine making industry.
Ningxia has been identified as a pilot zone for the development of the Chinese wine industry by the Chinese central government, with the region being visited by President Xi Jinping just before the Covid lockdowns.
TWE has continued to base its up-market Penfolds operations in Shanghai despite the tariffs and travel restrictions in the wake of Covid.
TWE chief executive Tim Ford said the release of a Penfolds wine made in China was the result of the company’s long term commitment to the market.
After the initial announcement in November 2020, China stepped up its action against Australian wine in March 2021, announcing the imposition of levies on wine of more than 200 per cent for some companies for the next five years.
The Federal Government lodged a complaint to the World Trade Organisation against the Chinese tariffs in June last year.
The China launch comes as Penfolds announced plans to market wine made in France, America, and China under a new brand of One by Penfolds.
The brand will be launched in mid 2023 with four wines from three wine making regions, all selling at a cost of around $50 a bottle.
The new brand will seek to highlight TWE’s diversification strategy, making a feature of the specifics of each production region, with Penfolds also working with local communities in each production area.
In China, it is partnering with the China Agricultural University to establish a student fund and an academic exchange program which supports winemaking and viticultural studies for local winemakers.
This follows a partnership announced earlier this year between the company and the China Alcoholic Drinks Association.
“Developing talent and sharing viticulture and wine making expertise underscores the partnership between the China Agricultural University and Penfolds,” Tianhong Li, dean of the college at the university, said on Thursday.
He said the financial assistance with tuition and access to wine samples around the world would assist students and help develop talent in the local wine making industry.
One by Penfolds will be available in China from October, with the brand launching next year in the other regions.
Penfolds’ links with China date back to 1893 when the first wine with a Penfolds label was exported from South Australia to Shanghai.
The launch of the China wine comes as Australia and China are set to mark 50 years of official ties between Beijing and Canberra in December.
Mr Ford presented China’s ambassador to Australia, Xiao Qian, with a bottle of the Chinese made wine at a reception at the embassy in Canberra earlier this month.
GLENDA KORPORAAL
ASSOCIATE EDITOR (BUSINESS)
Recent talk that China may resume buying Aussie coal had me buying some wine. Not by the bottle but the company (TWE). Unfortunately there is no rock lobster listed company so I just have to buy them to eat them immediately. Washed down with some wine naturally.
If the China wine tariffs are removed TWE will be rapidly revalued possibly back to ~$19 (old highs).
I think their mgt team have done a remarkable job since the tariffs were imposed.
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