Nov 30 (Reuters) - Treasury Wine Estates Ltd TWE.AX said on Monday it would redirect some wine intended for China and cut costs after Beijing imposed tariffs on Australian wine, sending shares in the world's largest listed winemaker crashing more than 10%.
Over the weekend, China imposed temporary anti-dumping tariffs of 107.1% to 212.1% on wine imported from Australia, with Treasury Wine facing a rate of 169.3%, the highest of any of the named wine companies. in Treasury Wine fell nearly 12% in early trade to their lowest in more than three weeks, building on Friday's sharp losses. Treasury Wine has shed about A$1.6 billion in value since Thursday.
Nearly a third of Treasury Wine's earnings in fiscal 2020 came from China, where it enjoys strong demand for its higher-margin luxury wine. It said demand in China would be "extremely limited" because of the tariffs.
The company said it would redirect its Penfold's Bin and Icon luxury range of wines, a quarter of its global volume, from China to other markets such as Australia, the United States and Europe.
Future vintage intakes from 2021 would also be reduced and overhead and supply costs cut, it added.
"We are extremely disappointed to find our business, our partners' businesses and the Australian wine industry in this position," Chief Executive Officer Tim Ford said.
In August, China began an anti-dumping probe of Australian wine imports as relations between Beijing and Canberra deteriorated over issues including a new foreign interference law in Australia and calls from Canberra for an investigation into the origins of the coronavirus. China accounts for near 40% of Australian wine exports.
"There is no doubt this (tariffs) will have a significant impact on many across the industry, costing jobs and hurting regional communities and economies which are the lifeblood of the wine sector," Ford added.
The tariffs are yet another blow to Treasury Wine this year, as global curb on travel and social gatherings have hit sales, especially at its non-retail channels that include bars and restaurants.