Treasury Wine Estates is expected to lift prices of its top-tier Penfolds products as Beijing lifts restrictions on wine from Australia.
👉 Background: Treasury Wine Estates is an Australian winemaking business. In 2020, when things got a little heated between China and Australia, China imposed tariffs on Australian imports for several categories, including wine.
👉 What happened: Treasury Wine Estates is expected to lift prices of its top-tier Penfolds products because export demand has increased once again, as Beijing lifts restrictions on wine from Australia.
👉 What else: The impact of the lifting of restrictions has been huge already. Some experts estimate the price rises could be between 5% - 7%.
💡A tariff is a tax on goods or services imported into a country. Governments can impose tariffs for various reasons, such as, to raise government revenue, protect domestic industries, or to exert political leverage over another country.
💡Tariffs increase the price of imported goods and services, and thereby make them appear less attractive to domestic consumers. But for Treasury Wine, the Penfolds brand is still strong in China.
💡It's not uncommon to see tariffs used as an extension of foreign policy. For example, when Russia invaded Ukraine, much of the world protested by boycotting Russia or imposing sanctions.
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