TWE: Penfolds did not hit rock bottom in China

Australian wine giant Treasury Wine Estates (TWE) has issued a statement, refuting a viral Chinese story that claimed its flagship brand Penfolds has “hit rock bottom” in China.

In a statement sent to dbHK, the company wrote, “A recent news story titled ‘Australian wine brand Penfolds hitting rock bottom in China market’（澳大利亚Penfolds葡萄酒中国市场遭遇低谷）disseminated and reposted across online and social media channels in China contains extremely misleading and inaccurate information related to Treasury Wine Estates (TWE) and the Penfolds brand owned by TWE.”

In the original Chinese story that was first posted on China.com.cn, an official news portal directly under China’s State Council Information Office, it was claimed that TWE’s current financial performance is suffering a 53% decline and that the company is planning to cut 25 brands for “self-rescue”.

The story was quickly picked up by People’s Daily Online, the official news portal of the Chinese Communist Party and was reposted by other news outlets and shared on Chinese social media platforms.

In response, TWE wrote: “In fact, in the first half of Fiscal 2017, TWE Asia reported 75.6% EBITS growth to AU$79 million and an EBITS margin of 36.2%.” When asked by dbHK on the phone about the source for the 53% decline, Tommy Tse, North Asia public relations manager for the company, said the figure was lifted from reports posted a few years back. 

During the first half of the fiscal year of 2017, Asia reported the fastest EBITS growth rate and its sales volume, “increased strongly and price increases across key brands delivered positive NSR per case growth,” said the company in February when releasing its financial results.

In the meantime, the company also reiterated that it is not planning to cut brands. “The TWE brand portfolio includes nearly 80 wine brands, such as the globally recognised Penfolds, Wolf Blass and Beringer Vineyards. Claims in the article of TWE terminating brands are completely false and misleading,” it wrote. 

TWE has enjoyed immense success in China market especially with the Penfolds brand, in part thanks to its auspicious Chinese transliteration ‘Ben Fu’ that means ‘chasing prosperity’.

Tse maintains that the company is still looking into the case and that it retains its right to pursue legal actions against media outlets reporting on false information. At the time of publishing the original story that appeared on China.com.cn seems to have been removed from its website.