Treasury Wine Estates, an ASX-listed producer, anticipates that 55% of its fiscal 2024 earnings will be generated in the second half of the year. The company is making this projection as it prepares for a potential review by China of tariffs imposed on Australian wine.
In the 12-month period ending in June 2024, the earnings before interest, tax, and other items (Ebits) are expected to be split between the December and June halves, with a distribution of 45% and 55% respectively. This decision was based on Treasury’s strategic approach to the timing of Penfolds shipments across all markets, aiming to maintain flexibility in distribution and pricing.
Speaking at Treasury’s annual general meeting, Chief Executive Tim Ford highlighted that this strategy is a response to the possibility of a future review of tariffs on Australian wine in China. China, being Australia’s largest trading partner and a significant market for local wine producers in the past, imposed heavy tariffs that severely impacted wine exports and led to an oversupply of premium wine in the country.
The imposition of tariffs came amidst worsening diplomatic relations between China and Australia. However, there has been progress in recent times, with the lifting of barley tariffs and the recent release of an Australian journalist who had been detained for over three years. Treasury Wine Estates is optimistic that these positive developments could potentially lead to a review of the tariffs by China.