TWE ASX: China is removing the crippling tariffs on Australian wine exports from March 29, but it will be a hard road back for wine groups other than Penfolds owner Treasury Wine Estates.

Already a subscriber?China is removing punishing tariffs on Australian wine imposed more than three years ago, restrictions which have all but destroyed aThe Chinese Ministry of Commerce, late on Thursday, said the tariffs would be removed on Friday. They were imposed in late 2020.

The decision came as senior Australian business figures visited China. Beijing has been offering an olive branch to the business community in a bid to revive foreign investor confidence in the world’s second-largest economy, which has failed to bounce back from the COVID-19 pandemic.The Ministry of Commerce said changes to the Chinese wine market meant it was no longer necessary to impose the trade restrictions.

Analysts from E&P earlier this month estimated that a restart of Australian exports to China could add $100 million to Treasury Wine’s annual earnings by 2026. E&P analyst Phil Kimber said that before the COVID-19 pandemic, Treasury Wine’s China operations delivered between $180 million to $200 million of earnings annually. Mr Kimber said should Treasury Wines regain half of that business, it would add 10 per cent to earnings within three years.

He said China had represented about 30 per cent of group earnings before the tariffs were imposed, and $450 million of revenue.

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