China-Australia relations: Treasury Wine Estates takes hit from Chinese import duties as share price plummets

The stock price of Treasury Wine Estates, known for the Penfolds brand, fell sharply on Friday, with trading suspended after China announced wine duties

China’s Ministry of Commerce said the duties of up to 212.1 per cent are provisional when they are applied on Saturday and that final rates could be different

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Trading in shares of Treasury Wine Estates was suspended on the Australian Securities Exchange soon after the duties were announced. Photo: Handout

Published: 2:05pm, 27 Nov 2020Updated: 5:05pm, 3 Dec 2020

Australia’s top selling wine company and owner of the popular Penfolds label, Treasury Wine Estates, suffered an 11.25 per cent hit to its share price on Friday morning after China’s commerce ministry announced temporary anti-dumping duties on Australian wine imports from Saturday.

The duties will range from 107.1 to 212.1 per cent, China’s Ministry of Commerce announced on Friday, with Treasury Wines due to face a 169.3 per cent tax.

Sales in Asia, mainly China, made up around half of Treasury Wine’s A$455 million (US$335 million) profits before interest and tax in 2019-20, with China the fastest growing sector for the winemaker.

The prospect of the anti-dumping investigation has hurt its share price since August, forcing it to suspend a demerger of Penfolds, a brand revered in China.

Trading in shares of Treasury Wine Estates was suspended on the Australian Securities Exchange soon after the duties were announced.

Imposing the temporary duties ahead of the conclusion of the anti-dumping investigation due to finish in August 2021, the commerce ministry said “there is a causal relationship between [wine] dumping and material damage”.