Treasury Wine Estates: Corona virus ‘significantly’ hits wine sales in China

The owner of Penfolds has warned investors that coronavirus has significantly affected wine sales.

Treasury Wine Estates’ discretionary wine sales have been significantly impacted in China as coronavirus fears take hold.

THE impacts of coronavirus continue to wreak havoc on Treasury Wine Estates, with the owner of Penfolds flagging a full-year profit downgrade as sales tumble in China as the country buckers down in fear of catching the potentially deadly virus.

The company informed the stock market this afternoon that wine consumption across China has been significantly impacted this month, and sales are expected to continue to plummet next month.

Previously reported profit guidance of earnings growth of between 5 per cent and 10 per cent for the 2019 financial year would no longer be achievable.

The news comes two weeks after TWE first flagged a potential hit to earnings from China’s coronavirus outbreak if sales there were impacted for a sustained period of time.

The wine company’s share price has plummeted from $17.67 to $11.17 since Monday when the Department of Foreign Affairs and Trade raised the level of travel advice for Wuhan to level three: “reconsider the need to travel.”

TWE’s staff are yet to return to the company’s China headquarters and are being forced to work from home by central government and provincial authorities in China.

Consumption across TWE’s discretionary wine categories after Chinese New Year have been “significantly impacted”, but the fallout is not expected to extend to other Asian markets where the virus has taken hold to the extend it has in China.