TWE Reports 34.7% Surge in Penfolds Sales in Asia for FY2024

Treasury Wine Estates (TWE) has reported a 34.7% increase in sales revenue for its flagship brand, Penfolds, in the Asian market for fiscal year 2024, driven by strong growth in Thailand, Hong Kong, and Taiwan, as well as a recovery in mainland China during the fourth quarter.

Penfolds now accounts for nearly 40% of TWE’s total sales, with the Asia region contributing 62.92% of the brand’s total revenue.

TWE’s annual report shows net sales revenue of AUD 2.739 billion for FY2024, a 13.1% increase from the previous year. Earnings before interest and taxes (EBITS) rose by 12.8% to AUD 658.1 million. The company attributed the growth to strong performances from Penfolds and its Americas division, including contributions from its acquisition of DAOU Vineyards in the second half of the fiscal year. Combined, Penfolds and TWE Americas contributed more than 75% of the group’s EBITS.

Penfolds, one of the most recognized wine brands in China, generated AUD 1 billion in net sales revenue, up 22.1% year-on-year, with EBITS reaching AUD 421 million, a 15.5% increase. TWE Americas also saw net sales revenue of AUD 1 billion, matching the 22.1% year-on-year growth, with EBITS at AUD 230 million, a 13.1% rise.

The report highlights that Penfolds’ growth is closely linked to the Asian market, with accelerated performance in Hong Kong, Thailand, and Taiwan. Additionally, Penfolds began shipping its Australian product range to mainland China in the fourth quarter of 2024 following the removal of tariffs in late March.

Data from Chinese Customs shows that in the second quarter of 2024, the volume of Australian wine imported into China surged by 3,385.57% year-on-year, while the value jumped by 17,170.62%. Analysts suggest that Penfolds led this growth, given the high average price of AUD 13.63 per liter for Australian wine imports during this period.

The financial report reflects TWE’s strategic positioning in the market: following the tariff removal, Chinese demand for Penfolds’ Australian wine was strong, with consumption levels meeting expectations. In response to the high global demand for Penfolds, which exceeds supply, TWE raised prices on key products starting July 1, 2024.

Asia remains the largest regional market for Penfolds, with sales revenue of AUD 629 million in FY2024, up 34.7% year-on-year, and accounting for 62.92% of the brand’s total sales revenue. This underscores the significance of the Asian market to both Penfolds and TWE.

Looking ahead, TWE forecasts EBITS of between AUD 780 million and AUD 810 million for FY2025, driven by continued expansion in high-end wines, including strengthening Penfolds’ distribution and brand presence and developing U.S. wine brands like DAOU.

However, as previously reported by Vino Joy News, the market response to Penfolds in China has been mixed. While many Chinese wine merchants have stocked up on Penfolds wines, the end-market reaction has been lukewarm, attributed to a challenging economic environment and decreased demand for business gifts during the off-season. The outlook for Penfolds’ sustained sales growth in China remains uncertain, with the market’s performance during the mid-year and Chinese New Year periods expected to be pivotal.