Treasury Wine Estates (TWE) released its financial results for the first half of the 2025 fiscal year (July 1 – December 31, 2024), reporting strong revenue and profit growth driven by Penfolds’ return to the Chinese market and the robust performance of the DAOU brand in the U.S.
Revenue and Profit Growth
TWE’s net sales revenue (NSR) for H1 FY2025 reached AUD 1.54 billion (USD 981.9 million), up 20.2% year-on-year, while earnings before interest and taxes (EBITS) increased 35.1% to AUD 391.4 million (USD 247.3 million).
The company’s NSR per case rose 16.1%, reflecting strong demand for the Bin and Icon series in the premium wine segment, as well as the positive impact of price increases on Penfolds wines.
Additionally, the acquisition of DAOU contributed to a 41.0% revenue increase in Treasury Americas, though sales of other U.S. brands and Treasury Premium Brands declined.
Asia, Only Growth Driver for Penfolds
Penfolds played a key role in TWE’s growth, particularly in China, where sales rebounded following the removal of Australian wine tariffs.
According to the financial report, Penfolds’ NSR for H1 FY2025 rose 24.4% to AUD 557.4 million (USD 352.2 million), while EBITS increased 33.9% to AUD 250.2 million (USD 158.1 million). Sales volume grew 12.5% to 1.5 million cases (9L per case).
Asia was the only region where Penfolds recorded revenue growth, with NSR surging 50.4% to AUD 386.1 million (USD 243.9 million), accounting for 69.3% of total Penfolds sales. While the report did not disclose detailed figures for China, market analysis suggests that China played a significant role in this growth.
TWE expressed satisfaction with this performance, noting that inventory depletion remained at a healthy level. The report highlighted that consumer demand remained robust in H1 FY2025, and promotional activities in the December quarter helped drive inventory depletion rates comparable to H1 FY2020 (the second half of 2019, before tariffs on Australian wines were imposed).
Moreover, the depletion rate for Penfolds’ Bin and Icon series saw double-digit growth across all channels compared to H1 FY2020, reflecting strong market demand for premium wines.
A Penfolds distributor in East China who spoke to Vino Joy News shared insights into local sales trends. “After the peak sales season before the Lunar New Year, our long-term Penfolds customers (not those who joined last year) had only about 20% of their inventory left, which is a very healthy level,” he said. “These customers stocked up in June and November last year, and so far, sales have been moving well.”
Cross-Border Imports Account for 5% of Penfolds’ China Sales
The report also noted that online sales contributed 20% of Penfolds’ revenue in China, with wine sales in this channel growing 6% year-on-year in H1 FY2025, driven by Penfolds’ proactive strategies.
While TWE reported a 72% year-on-year increase in e-commerce sales in China compared to H1 FY2020, it also acknowledged that parallel imports had created pricing challenges.
The report stated that “cross-border e-commerce channels provide consumers with more competitively priced products.”
Vino Joy News previously reported that price discrepancies between China and Australia had fueled a surge in parallel imports on Chinese e-commerce platforms. Many of these products entered China through duty-free and VAT-free cross-border channels, allowing them to be sold at significantly lower prices.
Xu Xiaotong, General Manager of Dijon Wine Cellar in Liaoning, Northeast China, said his business was affected by low-priced parallel imports online.
“Right now, JD.com’s self-operated Penfolds Bin 407 is priced at just over RMB 600, while my store’s parallel-import Bin 407 is priced above RMB 700 after adding a reasonable profit margin,” Xu said. “Low-priced online products have always existed, but now the price gap has widened significantly, especially for JD.com’s self-operated products.”
JD.com, one of China’s largest e-commerce platforms, is known for authentic products at competitive prices, which has pressured traditional distributors.
Xu noted, “TWE’s authorized distributors have approached me to sell official Penfolds imports, but due to the price pressure from online platforms, I can only make small purchases to cater to specific customer needs.”
Market Uncertainty Poses Risks
For the full FY2025, TWE forecasted EBITS of approximately AUD 780 million (USD 490 million), at the lower end of its previously guided range of AUD 780–810 million. The company cited weaker-than-expected performance in Treasury Premium Brands and economic uncertainty in key markets, including China as the main reasons for its cautious approach.
Distributors in China have echoed these concerns, citing slower sales momentum and shifting market dynamics.
A South China-based distributor said Penfolds’ sales had fallen short of expectations. “Even after the Lunar New Year peak, we still have stock of Bin 389 and Bin 407. That would have been unthinkable in 2019,” he said. “Penfolds’ strong brand power is the only reason it’s still outperforming other wine brands.”
A distributor in East China highlighted how the market environment had shifted dramatically since 2019. “Buying Penfolds no longer requires bundling with TWE’s other products, and every part of the supply chain now has to actively promote sales. The days of waiting for customers to come to us are over,” he said.
These factors could put long-term pressure on Penfolds’ sales and force TWE to explore new marketing strategies.
Additionally, TWE warned that rising production costs, global inflation, and geopolitical risks could impact performance.
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