Following Beijing’s decision to lift tariffs on Australian wine last week, Treasury Wine Estates has announced a price increase for its premium Penfolds range. The adjustment, set to take effect on July 1, comes as the company prepares to resume wine exports to China, starting with a shipment from Adelaide on April 2.
The Australian wine giant Treasury Wine Estates is seen as the primary beneficiary of the Chinese Ministry of Commerce’s recent decision to eliminate the tariffs instituted in late 2020. The group was the biggest Australian wine exporter to China where its flagship brand Penfolds was among the most popular imported wine brand in the country.
The lifting of these restrictions has already had a noticeable impact. According to a report from Australian Financial Review, the Randall Wine Group, one of the largest privately owned producers with brands including Seppeltsfield Estate, had received an order for 156,000 bottles mere hours after the change was announced. The group was exporting annually about AU$40 million to the Chinese market before hit by 218% tariffs in 2021.
The tariff removal marks the end of one of the last significant sanctions against Australian exports worth AU$20 billion, imposed amid deteriorating bilateral relations under the previous Coalition government. However, tariffs on lobster and beef exports remain in place.
Treasury Wine Estates has not commented on the specifics of the price increases but noted that global demand for the Penfolds Bin and Icon series outstrips supply. Consequently, price adjustments will not be limited to China but will extend across all its export markets, aiming to maintain the brand’s pricing integrity and long-term health.
Industry analysts, such as Jarden’s Ben Gilbert, predict the price hike could range between 5% and 7%.
The tariff lift has rekindled optimism among Australian wine producers, with many, including Warren Randall of the Randall Wine Group and Chester Osborn of d’Arenberg Wines, planning to re-engage with the Chinese market through sales trips and targeted marketing strategies.
Chester Osborn, the chief winemaker at d’Arenberg Wines, announced plans to focus on the super-premium segment in an effort to recoup the AU$6 million in annual sales that were forfeited due to the imposition of tariffs.
Despite the optimistic outlook, challenges remain, particularly in achieving pre-tariff sales levels and navigating a Chinese market that has significantly contracted.
Treasury Wine Estates remains cautious in its financial projections, anticipating minimal earnings from Chinese exports this fiscal year, with modest growth expected in the subsequent years. However, the company is optimistic about a significant uptick in sales from 2026 as the availability of top-tier Penfolds wines expands, signaling a long-term commitment to recovering and enhancing its position in the Chinese market.
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