Australian wine giant Treasury Wine Estates has quietly rolled out South Africa made Rawson’s Retreat for China to bypass up to 218% punitive tariffs imposed on Australian wines.
Rawson’s Retreat, a wine brand originally produced and made in South East Australia, apparently is now being made in South Africa for the group’s Chinese market at least, according to Chinese language media reports.
C&D Wine, the wine importing business of state-owned logistics company C&D, announced on its social media that starting from July 1, it has become the exclusive distributor of Rawson’s Retreat in China, but buried deep in the announcement, it adds that the wines are made from grapes grown in South Africa.
The South African Rawson’s Retreat still bears the same look and feel as its Australian counterparts. The range has three wines based on information released by C&D, a Cabernet Sauvignon, a Shiraz and Cabernet blend and a Classic Red.
It’s not clear which South African winery worked with TWE on the project, and C&D told Chinese media that it does not plan to emphasize South Africa in its promotion.
Rawson’s Retreat is among the cheapest wine brands under Treasury. The brand a few years ago faced a wine glut problem in China market, as the wine is often bundled and sold with the much more popular Penfolds.
The over supply has created deep discounts among retailers and wholesalers, and the wine usually sells for about RMB 50 (US$7.7) a bottle in mainland China after taxes.
Reactions so far are mixed. Some applauded TWE’s “resourcefulness” and said Chinese wine drinkers don’t attach too much importance about wine region if the brand is strong. Others adopted a wait-and-see attitude.
Despite China’s crashing tariffs on Australian wines, China proves too big to lose for TWE.
The market alone is responsible for one third of its annual revenue, and the wine giant has since come up with California collection and now the South African Rawson’s Retreat to mitigate damages.
It also did not rule out possibilities to produce wines inside mainland China to circumvent the five-year punitive taxes.
Last August China announced an anti-dumping investigation into Australian wines as the relations between the two countries worsened over Covid-19 origin. Shortly in November, China imposed a preliminary tariff on Australian wines of up to 212%, which was eventually formalized and capped at 218% in March this year.
Treasury as the country’s biggest wine exporter to China was penalize at 175.6% of duties.