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Penfolds sees “renewed” market momentum in China by 20/06/2024  


Treasury Wine Estates (TWE) CEO Tim Ford said it was “fantastic” to see local Chinese consumers reignite their passion for Penfolds’ “great Australian luxury wines”, and a sense of renewed market momentum now that the China market has reopened.

“We are delighted to be bringing more of our Australian luxury wines back to China, at a time when the luxury wine market presents significant long-term growth opportunities for Penfolds and the wine category overall. By leveraging our unique Penfolds brand status to drive ongoing demand, we remain steadfast on our clear ambition to be the number one luxury wine brand in the market.”

TWE CEO Tim Ford. Image courtesy TWE

Fuelling TWE’s enthusiasm for long-term growth opportunities in China, the company announced the delivery of a record 2024 Australian vintage which will support a significant step-up in the availability of Penfolds Bin and Icon wines from 2H26.

“The 2024 Australian vintage has delivered record intakes for key Bin and Icon portfolio wines as a result of a combination of factors, including our extensive grower network and TWE’s decisive measures taken to create the best opportunities to provide luxury grade fruit, which are clearly paying off.

“Since 2018, TWE has invested $100 million in vineyard replanting and acquisitions to enhance long term production capacity, focusing on soil revitalisation and vine redevelopment. Additionally, from 2018-2022 we invested $180 million in TWE’s Barossa winemaking and packaging facilities to ensure world-class supply chain capabilities to cater for increased luxury wine production and availability.”

Penfolds managing director Tom King added that Penfolds’ portfolio of globally sourced luxury wines continued to provide consumers from across China with access to wines from the world’s most revered wine regions including Australia, America, France and more recently China.

“Similar to the roadmap we have followed in France, we continue to explore further winemaking opportunities in China, including investing in local sourcing and production opportunities to support future portfolio growth opportunities,” said King.

TWE provided an update on Penfolds outlook which includes:


Penfolds EBITS are expected to be delivered in the range of $418-421 million, driven by strong top-line growth across all portfolio tiers and price points, with the weighting of Bin & Icon portfolio shipments to 2H24 completed as planned.Penfolds EBITS margin is expected to be approximately 42%, reflecting the reestablishment of entry-level Australian COO Luxury tiers and higher onshore overhead costs in China through 4Q24 following the removal of tariffs.TWE continues to expect mid-high single digit Group EBITS growth in F24, excluding the EBITS contribution from DAOU .


Penfolds expects to deliver low double-digit EBITS growth, with top-line growth driven by price increases and a modest increase in shipments for the Bin & Icon portfolio, partly offset by step-up in brand building investment and overheads in China of approximately $20 million ahead of increased Bin & Icon portfolio availability from F26.Penfolds EBITS margin is expected to improve to within the range of 43-45%.

F26 and F27:

Penfolds will target annual EBITS growth of approximately 15% across both years, driven by the significant increase in availability for the Bin & Icon portfolio from the record 2024 Australian vintage intake.Penfolds will target EBITS margin delivery in line with its long-term target of 45%.

TWE noted that the delivery of these targets remains subject to a range of variable conditions, and outlined the below as important information regarding the risk factors related to these targets.

changing conditions in the China wine market,changes in economic conditions which impact consumer demand,changes to TWE’s production cost base, including impacts of inflation,global difficulties in logistics and supply chains,exchange rate impacts given the global nature of the business,vintage variations, andthe company’s continuing exposure to geopolitical risks.

TWE confirmed that with ongoing strong demand for Penfolds Bin and Icon portfolio, price increases would be introduced across Penfold’s global customer base, effective 1 July 2024.

In closing, Ford said: “This is an exciting time for TWE and the Penfolds business as we enter a post tariff era as a stronger and more diversified global business, with all the necessary elements at our disposal to maximise the incredible long-term growth opportunities in China.”