Treasury Wine Estates (TWE) announced this week it will divest itself of South Australia’s Wolf Blass brand which it acquired in 1996, as well as Yellowglen, Lindeman’s, and Blossom Hill.
Lower volumes of low-and mid-priced wines in recent years have had a financial impact on the company, with the four brands put up for sale now contributing less than 5 per cent of TWE’s profit.
The announcement comes at an uncertain time in the South Australian wine industry, which is still feeling the effects of the 2020 imposition of punitive tariffs by China.
The Chinese tariffs were lifted earlier this year and had an immediate effect on shipments. In May, Australian wine exporters shipped nearly 10 million litres of bottled wine to China, with South Australian wine businesses leading the post-tariff surge.
However, that rise masked a decline in exports outside mainland China, according to Wine Australia, with the amount of wine sent abroad in the year to June dropping to the lowest level since 2004.
Wine Australia Manager, Market Insights, Peter Bailey said that exports to the rest of the world (excluding mainland China) declined by 4 per cent ($68 million) to $1.8 billion and volume decreased by 5 per cent (33 million litres) to 587 million litres.
This is the lowest volume exported to the rest of the world in a financial year since 2003-04. The decline in volume was most significant in unpackaged exports priced under $1.50 per litre to the United States (US) and Canada (down a combined 20 million litres).
“Global trading conditions remain very challenging with wine consumption continuing to fall in many markets around the world due to moderation trends and cost of living pressures. There are also enduring problems in shipping, with a shortage of ships globally and freight and charter rates on the rise,” Mr Bailey said.
