Announcing the company’s 2023 results, TWE’s chief executive, Tim Ford announced that “We’re going to plan to ship more in the second half in totality, just to give us the flexibility should the situation change with China over the next four or five months … It’s about giving ourselves the flexibility about how we allocate over the course of the full year.”
While sales of the Australia giant’s Penfolds wines have – like all Australian imports – been devastatingly affected by the tariffs, the company has maintained its presence in the market and attracted interest by launching a made-in-China wine last year.
China not to blame
Australian producers hoping that a reopening of the Chinese market will being instant relief to the surplus of grapes on their vines and wine in their cellars are likely to be disappointed, however. Chinese consumption of both imported and domestically produced wine has halved in recent years, and Australia’s place in the market has been taken by France, Chile and South Africa.
Also, as Dudley Brown reported in Meininger’s in May, the Chinese tariffs were only responsible for 19% of the Australian oversupply through June 2022, while large harvests in 2020 and 2021 principally accounted for the other 81% of inventories.