Penfolds and Wolf Blass wine maker see profits double

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Profits for the Australian makers of Penfolds and Wolf Blas wines have more than doubled, boosted by growing thirst from younger Asian drinkers.

Profits for Treasury Wine Estates (TWE) rose to A$179.4m (£106m).

As economic growth has slowed in Asia, the company has aimed lower-priced bottles at millennial drinkers.

This replaced its previous marketing focus which targeted sales of more expensive wine to older, wealthier customers.

"The millennial consumer tends to be a very good target for us. What we are finding is that a lot of those consumers are moving away from other beverages like beer, spirits and baijiu in China and moving to wine," said chief executive Michael Clarke.

Treasury shares soared 11.5% to $10.65 in Sydney on Thursday, bringing the rise this year to 28%.

The strong sales in Asia are reflected in its valuation, said Ben Le Brun, a Sydney-based analyst at OptionsXpress.

"We're dealing with a stock that already trades at a significant premium to the rest of the market. It's good foothold into Asia probably has to do with that good valuation."

Treasury said its purchase at the start of the year of Diageo's wine business, which includes the Piat D'or brand, had been positive for its margins and would help earnings to grow strongly next year.

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