Despite Dan Andrews instructions to get on the beers, it seems we have switched as a nation from beer to wine. Australian consumption preferences are now bottled wine is 34% of the market, regular strength beer 19%, although if you add mid and low strength, total beer is 33% bottled spirits are around 15% and then there is the rest.

Treasury is in the market if flogging us wine, they hold some respectable brands including Penfolds. 

The business has been significantly covid restriction, supply chain interruptions, and China no longer friends with Australia impacted – if you recall they slapped 200% tariffs on Australian wine imports. 

The company is attempting to circumvent this by growing grapes for Penfolds in France. CEO Tim Ford said the company plans to launch a French collection of Penfolds. Ford said, “It’s going to take us multiple years as we build up our luxury wine portfolios out of France and America to really meet that demand over time, and we look at that as a long-term journey to rebuild our market there in China.”

Results released today for the half ending December ‘21:

• Revenue of $1.27 billion, down 10.1% year-on-year 
• Earnings before a myriad of acronyms of $262.4 million, down 6.7% year-on-year 
• Net profit after tax of $109.1 million, down 7.5% year-on-year
• Interim dividend of 15.0 cents per share fully franked

The market though this was ok, mostly as the business managed to grow without China. 

Ford said the business is shifting from ‘recovery and restructuring’ to one of ‘growth and innovation’. 

This is where you must have a leap of faith that restriction and supply chain issues will see consumers returning as before, and they can resurrect the China market by other means. In my mind this is the primary question, but competitors are not going to sit on the sidelines. 

This one is not currently on my shopping list. I still like beer.