By James Atkinson

Treasury Wine Estates (TWE)  has for the first time acknowledged the impact of Chinese Government austerity measures on demand for its wines in that market.

TheShout in late September reported that TWE faced a new problem of excess inventory in the China market, a suggestion that was downplayed by the company at the time.

But acting CEO Warwick Every-Burns today told shareholders that the China situation was another factor that would challenge the company in the 2013-14 fiscal year.

“In keeping with recent announcements by other alcoholic beverage and luxury goods businesses, we are observing signs that consumer pull through in China is softening as a result of the recent leadership change and well-documented Government austerity measures,” he said at the company’s AGM in Adelaide.

“Fiscal 2014 will be a challenging year for TWE with our EBITS strongly influenced by the depletions performance we deliver in the United States and a range of other factors, including the benefit of vintage 12 wine and the volatility of the Australian dollar.”

He said the company would not provide more detailed guidance at this time, but remained committed to an EBITS range of between $230 million to $250 million for fiscal 2014, as communicated at its annual results. 

The Shout Team

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