TWE reaffirms positive growth in Asia

Treasury Wine Estates (TWE) has hit back at ‘negative’ comments by analysts, reaffirming positive and sustainable growth and margin in Asia.

The Australian winemaker said it wanted to clarify its outlook in response to Goldman Sach’s downgrading its outlook yesterday on the back of “unrealistic” expectations of the Chinese market, which it said potentially gave rise to “misleading statements”.

It argued that volume growth and profitability of its business model in China, and the region had been driven by “significant” routes to market investment and brand-building, along with the favourable backdrop of imported wine in the Chinese market.

“Significant opportunity for continued, sustainable growth exists in China”, it said, pointing to its expansion into strategically important cities and provinces, as well as in cities it was already active in. It noted that it had extended its reach across different channels in China in these existing cities, and that more higher income earners were coming into the imported wine category.

As a result, the company argued that the Asia region would deliver EBITS margins of 30-35% “on a sustainable basis”, underpinned by its “disciplined approach to driving luxury and ‘masstige’ [mass prestige brands] volume growth”.

“TWE expects to have significantly more luxury and ‘masstige’ wine available for sale in F19 and beyond as the 2016 and 2017 Australian vintages and the 2016 Californian vintage becomes available for sale. In addition, with a multi-region sourcing model and by pursuing portfolio growth that spans multiple countries-of-origin, TWE is well positioned to satisfy growing demand for premium wine, globally,” it said.

It reiterated the guidance provided in February, saying the second half EBITS were expected to be broadly in line with the first half.

Treasury Wine has seen its market share of China grow over the last three years, and last August the company reported its earnings before tax (EBITS) in Asia had grown by 40% compared with the previous year, to AU$102 million.

Leave a Reply

Your email address will not be published. Required fields are marked *

Please note that comments are subject to our posting guidelines in accordance with the Defamation Act 2013. Posts containing swear words, discrimination, offensive language and libellous or defamatory comments will not be approved.

Subscribe to our newsletters

Sales Representative - Private Customers

Corney and Barrow
Central Hong Kong, HK

Export Manager UK On Trade

AdVini
Home based in London or the South East, GB

Global Head of Marketing

ATOM Brands
Tunbridge Wells, GB

Sales Executive

Three Wine Men
Home-based but must be available to travel throughout the UK with frequent trips to London, GB

Senior Sales Operations Executive

Enotria&Coe
Park Royal, London, GB

Sales Administrator

Les Caves de Pyrène
Guildford, UK

On Trade & Corporate Accounts Manager

The Champagne Company
Birmingham, UK

Customer Service Assistant

The Champagne Company
Birmingham, UK

Key Account Manager - Distilling Sector - Scotland

Boortmalt
Scotland - call for exact details, UK

UK Brand Ambassador - Ableforth’s

ATOM Brands
Field-based, UK

Pink Rosé Festival

Cannes,France
7th Feb 2018

VinoVision Paris

Paris,France
12th Feb 2018

Vinisud

Montpellier,France
18th Feb 2018
Click to view more

The Global Pinot Noir Masters 2018

Deadline : 26th January 2018

Cabernet Sauvignon Masters 2018

Deadline : 23rd February 2018

Click to view more

The Global Malbec Masters 2017

the drinks business is proud to announce the inaugural Global Malbec Masters 2017

The Global Sparkling Masters 2017

the drinks business is thrilled to announce the launch of The Global Sparkling Masters.

Click to view more