Trending news
Treasury Wine Estates (ASX:TWE): Can It Bounce Back After China’s Tariff Removal?
For more than three years, Treasury Wine Estates (ASX:TWE) – the company behind the world-famous Penfolds wine brand – suffered from China’s crushing 200% tariffs on Australian wine imports. These tariffs, introduced in November 2020, wiped out its most lucrative market and forced the business to find alternatives in Asia and beyond.
But in March 2024, Beijing scrapped the tariffs. For investors, the big question was: Does this mean business is back to normal for Treasury Wine Estates?
Treasury Wine Estates and the China Opportunity
Treasury Wine Estates (TWE) is Australia’s largest listed winemaker, with a global distribution network. Before the pandemic, China was its biggest growth driver thanks to the country’s expanding middle class and appetite for premium wines.
The 200% tariffs, however, crushed its China sales overnight. While TWE tried to diversify into other Asian markets, none were as profitable as China.
The Return to China
On March 28, 2024, just before Easter, China officially removed tariffs on Australian wine. TWE quickly resumed exports and even invested A$27.5 million in a vineyard in Ningxia, China, to strengthen its local presence.
In FY25, the company reported:
Revenue: A$2.9 billion (↑ 6%)
Net Profit After Tax (NPAT): A$436.9 million (↑ 342%, mainly due to fewer impairments compared to FY24)
It also promised “mid double-digit growth” for its luxury Penfolds brand, signaling a sharper focus on the high-end wine segment.
Challenges Beyond China
While China’s tariffs are history, TWE is not entirely out of trouble. Challenges include:
Competition: European and American winemakers already dominate parts of the Chinese market.
US Market Issues: One of TWE’s distributors in the US ceased operations, although the company said this would have a limited impact.
Leadership Change: Long-serving CEO Tim Ford stepped down, replaced by Sam Fischer in 2025.
Investor Sentiment: Despite its recovery, TWE was demoted from the ASX 50 in September 2025, triggering institutional selling.
Is TWE a Buy?
While the return to China is a major positive, it may take years for TWE to rebuild the dominance it once enjoyed. Competition, shifting consumer preferences, and global trade risks remain big factors.
Investors should view TWE as a long-term play, with growth potential in premium wines, but not without risks. It is unlikely to return to the golden days of pre-2020 anytime soon.
⚠️ Disclaimer
This article is for informational purposes only and does not constitute financial advice. Always conduct your own research or consult with a professional financial advisor before making investment decisions.