Australia’s Treasury Wine Estates (TWE) has said that it wants to sell more luxury French wines to China to build on growth in the country’s wine market.
- Asia helps to drive Treasury Wine Estates sales and profits growth
- Company wants bigger slice of French wine market in China
- New French export figures show overall drop in shipments to China in 2018
Demand for luxury wines in Asia helped Penfolds owner TWE to report a 16% rise in group net sales to just over A$1.5bn for the first half of its financial year.
The region also helped to drive the wine firm’s global operating profits, or EBITS, up by 19% for the six months, to $338m.
Momentum in China remained strong, the firm said, despite broader concerns about the country’s short-term economic outlook.
The company said that it plans to use its distribution muscle in China to break further into the lucrative market for French wine in the country over the next few years.
‘The French category [in China] is one where the company is particularly focused on gaining share given it is the largest import category, accounting for around 30 to 40% of the market, and remains highly fragmented,’ TWE said.
‘TWE will aim to build on its existing French country of origin proposition, Maison de Grand Esprit, using the Penfolds and Beaulieu Vineyard brands.’
The group launched Maison de Grand Esprit in 2017 as a brand that could bring together luxury wines from top vineyards across France, including those in Bordeaux, Burgundy, Rhône and Provence.
TWE’s confidence and recent results in China struck a contrasting tone with comments from France’s wine and spirits exports body (FEVS) this week, highlighting why it can often be difficult to generalise when considering experiences on the Chinese wine market.
FEVS figures showed that overall French wine exports to China fell by 16% in value in 2018, dropping to €555.3m. Shipments to Hong Kong, which are counted separately, rose by 9% versus 2017.
Things were worse in volume terms, with the quantity of French wine shipments to China down by 25% in 2018.
However, FEVS blamed China’s current economic conditions for the falls and said that it still expected wine exports to the country to recover and prosper over the long-term.