Wine producer Treasury Wine Estates (TWE) has said that it no longer expects to achieve its forecasted EBIT growth of between 5% and 10% for the full year, due to the operational impact of the COVID-19 outbreak.
In a statement, the business said that consumption in China has been 'significantly impacted' during the month of February, and that this is expected to be sustained at least through March.
It said that all Treasury staff in China are working from home at present, on advice from local authorities, while its partnership network of wholesalers, retailers and logistics providers have also been affected.
'TWE will however remain vigilant in ensuring its shipments into the market are appropriately calibrated to the rate of depletions once consumption normalises,' it said.
Luxury Market
Given that Asia is a predominantly luxury wine region, the company said that it believes that it has the flexibility to allocate luxury wines to later fiscal periods or other geographies, in order to deliver 'sustainable earnings growth'.
It said that should the impact of the coronavirus outbreak be resolved in the current financial year, it doesn't expect its 2021 plans to be impacted.
'TWE remains committed to the health and safety of its employees and to being a supportive long-term partner to its customers in China, and will actively support them through this period,' it said. 'TWE’s advantaged business model and strong portfolio of brands means it is well placed to capitalise on the long-term opportunities in the Asia region, and globally.'
© 2020 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: European Supermarket Magazine.
