China market proves a profitable one for Australian wine maker

Australian wine company Treasury Wine Estates (TWE) will continue to deepen its focus on the Chinese market as its flagship Penfolds brand gains momentum, with executives describing China as a key growth engine in the company's long-term global strategy.

The Melbourne-headquartered group reported earnings before interest and taxes (EBIT) of A$492.3 million ($347.56 million) for its 2026 fiscal year ending June 30, exceeding the upper end of its guidance range of A$480 million to A$490 million, according to the company's annual results released last week.

The performance was supported by strong global sales of its core brands, particularly Penfolds, whose sales in the Chinese mainland market rose 34.7 percent during the fiscal year.

"Fiscal 2026 was a year of proactive transformation and profound change for TWE," said Sam Fischer, the group's CEO, adding that the company had made substantial progress in reshaping its business structure and laying foundations for long-term growth.

Fischer said global consumer sales, led by the Chinese market, showed particularly encouraging performance, reflecting the group's continued market execution and strengthening brand demand.

"The Chinese mainland is one of the world's most dynamic luxury beverage markets," said Wu Mingfeng, managing director for China at TWE.

"We remain confident in the market, not only because of Penfolds' strong brand influence, but also because of the long-term growth opportunities ahead."

Reflecting that long-term commitment, Penfolds launched its 2026 Collection in Hangzhou, Zhejiang province on Aug 11, featuring more than 20 wines from Australia, China, France and the United States, including the 2022 Grange marking its 75th anniversary and the China-sourced 2024 CWT 521.

Wu said that while Chinese consumers are becoming more selective and their purchasing choices more varied, premium wine continues to play an important role in gifting, dining and social occasions.

Australian wine exports have also benefited from the recovery of trade with China after tariffs on Australian bottled wine were removed in March 2024. Data from Wine Australia, the country's wine industry body, showed that exports to the Chinese mainland were the main driver of Australia's wine export growth in the following year.

TWE, with a sales network spanning more than 100 countries and regions, said it will continue investing in brand building, consumer engagement and partnerships in China.

The company's new regional operating model under its "Ascent" transformation program will take effect in China on Oct 1, with the aim of improving market responsiveness and operational efficiency.

Under this new strategy, TWE will streamline its brand portfolio, sharpen its focus on premium wines and maintain investment in core luxury brands, with the company aiming to strengthen local execution, improve efficiency and support long-term sustainable growth.