Treasury Wine gains on plans to resume distribution in China after import tariffs end

Australian Vintage

02/04/2024 05:36

By Archishma Iyer
       April 2 (Reuters) - Shares of Treasury Wine Estates
 TWE.AX  rose to their highest in about 11 months after the
company said last week it will resume the distribution of some
of its products in China after the Chinese Ministry of Commerce
removed tariffs on Australian wine imports.
    Treasury Wine rose as much as 3.2% to A$12.85 on Tuesday and
the company's shares were on track to close higher for the
fourth straight session.
    The Australian markets were closed on Friday and Monday due
to public holidays.
    Winemaker Australian Vintage's  AVG.AX  shares also rose
about 6% on Tuesday to their highest since late December.
    Treasury Wine will use partnerships with customers in China
to distribute its Penfolds entry-level Australian origin
portfolio as well as its Premium Brands Australian-sourced
priority portfolio, the company said on Thursday.
    China would lift anti-dumping and anti-subsidy tariffs on
Australian wine from March 29, the Chinese commerce ministry
said last week, ending three years of punitive levies and
offering long-awaited relief to Australian wine producers.
    "Removal of tariffs creates a medium-term growth
opportunity, with near-term modest growth to be driven by
increased shipments of entry-level tiers into China and
incremental price increases," Morgan Stanley analysts said on
Monday.
    The tariffs, of up to 218.4%, were first imposed in March
2021 for a period of five years along with a host of other trade
barriers on Australian commodities when ties soured after
Canberra called for a probe into the origins of COVID-19.
    Ties have improved significantly since last year, leading
China to steadily lift trade hurdles on Australian goods ranging
from barley to coal.

 (Reporting by Archishma Iyer in Bengaluru; Editing by Shounak
Dasgupta)
 ((Archishma.Iyer@thomsonreuters.com))