SYDNEY—Trade frictions between Australia and China have contributed to one global winemaker putting a cork in plans to spin off a luxury wine brand th
SYDNEY—Trade frictions between Australia and China have contributed to one global winemaker putting a cork in plans to spin off a luxury wine brand that is highly prized by collectors and can sell for thousands of dollars a bottle.
Treasury Wine Estates Ltd. on Thursday said it had frozen plans to list its Penfolds business separately, a day after the company said it had become aware that a Chinese industry association has asked Beijing to impose retrospective tariffs on Australian wine.
The written request by the China Alcoholic Drinks Association to the Chinese Ministry of Commerce, or Mofcom, would affect imports of Australian wine in containers of up to two liters if it is accepted, Treasury Wine said. The CADA request for tariffs potentially broadens Mofcom’s investigation, launched in August, into whether Australia is dumping cheap wine into the Chinese market.
“We have decided to formally pause work on a demerger to focus on key priorities including trading through Covid, the U.S. business restructuring and most specifically the Mofcom investigation in China,” Chief Executive Tim Ford said.
The decision, along with the threat of more tariffs, sparked an 8.2% fall in Treasury Wine’s share price to near five-year lows on Thursday. Treasury Wine is one of the world’s largest listed winemakers and competes with Constellation Brands Inc. and E&J Gallo Winery of the U.S.