That division includes big brands Wolf Blass, Lindemans, Squealing Pig, Pepperjack, Wynns, Seppelt and 19 Crimes. The cheaper end of the market is feeling the pinch, and the Treasury Premium Brands business suffered a 5.4 per cent drop in earnings to $81.7 million. “We do expect the decline in commercial wine to continue,” he said. Mr Ford said overall consumer demand for premium wine was expected to stay consistent over the next year, but conditions were difficult in the lower-tier segments below $10 a bottle. The new One by Penfolds wines made in China with grapes from the Ningxia region, which began selling in late 2022 at around $50 per bottle, have notched sales of 100,000 cases thus far. “We had some work to do to win back hearts and minds in the trade,” Mr King said. Tom King, the Penfolds division managing director, acknowledged that it had been hard work enticing the Australian market, which had been somewhat jaundiced at the heavy emphasis on China before the tariff shock. The company’s listings in retail stores and restaurants for Penfolds in Australia increased by 7 per cent over the past year. The Penfolds division delivered a 14.2 per cent rise in earnings to $365 million in 2022-23. Mr Ford said inflation had passed its peak in May, and so any future price rises would be more subdued. High-end Californian red wine under the Stag’s Leap brand was up 20 per cent in some instances. Penfolds Bin 407 cabernet sauvignon had a 9 per cent price rise, while the 19 Crimes label was up 6 per cent, and the Squealing Pig brand rose 9 per cent in the United Kingdom. The company said price increases pushed through on several brands was a key factor in profit margins increasing overall, along with internal cost-cutting. Treasury Wine lifted its final dividend to 17¢ a share from 16¢ a year earlier. A strong performance from the Penfolds division in the 12 months ended June 30 helped Treasury Wine withstand a tougher consumer spending environment, and demand for more expensive wines was robust even after price rises.
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