(Reuters) – Treasury Wine Estates Ltd said on Wednesday the US-based Wine Group would sell several Australian company brands made in the United States.
The deal comes as Treasury Wine, the world’s largest registered wine maker, plans to overhaul its business as it is hampered by the impact of high Chinese tariffs on Australian wines.
China last year imposed anti-dumping tariffs on Australian wines, citing complaints about foreign investment, national security and human rights policies, after Australia led calls for an international investigation into the coronavirus.
Wine Group, owner of the Franzia and Cupcake Vineyards, will source and sell the Beringer Main & Vine brands from Treasury Wine, Beringer Founders’ Estate, Coastal Estates and Meridian in America.
During the six months to December 31, the brands contributed A $ 92 million ($ 71 million) in net Treasury Wine revenue and A $ 13.5 million in gross profit.
The company said the deal would generate around A $ 100 million in funding.
Treasury Wine said Beringer remains a core brand in its portfolio and will not discard the brand as part of this deal or any future transactions.
The company’s shares surged earlier this week after reports that it was approaching a takeover by French alcoholic beverage maker Pernod Ricard or a US private equity firm.
($ 1 = 1.2955 Australian dollars)
Reporting by Shashwat Awasthi in Bengaluru; Edited by Shinjini Ganguli and Shounak Dasgupta
MILAN, February 10 (Reuters) – Louis Vuitton owner LVMH and music star Rihanna have agreed to close her fashion line Fenty less than two years after launch, the French luxury goods giant said on Wednesday.
LVMH said in a statement that the ready-to-wear activities of Fenty, which is based in Europe, would be “suspended” pending better conditions.
It said an investment fund backed by LVMH L. Catterton had taken a stake in Savage X Fenty, Rihanna’s underwear line.
“LVMH and Rihanna reaffirm their ambition to concentrate on the long-term growth and development of the Fenty ecosystem focused on cosmetics, skin care and underwear,” he added.
(Adding background on Chinese tariffs, Penfolds demerger plan)
February 8 (Reuters) – Treasury Wine Estates, responding to media reports, said on Monday it was not currently considering demergers from any of its businesses.
The world’s largest registered winemakers responded to a report here by The Australian which said it was considering dividing its global operations into three separate businesses.
In November, the company postponed plans for a spin-off from its prized Penfolds label as China would impose hefty 212% tariffs that have hit wine producers in its biggest market.
Australia’s exports to mainland China fell in November and December, largely due to tariffs, which led to a 14% drop in exports in 2020 to A $ 1.01 billion ($ 774.06 million) and a 29% decrease in volume.
Treasury Wine confirmed that Demerger Penfolds remains on hiatus, adding that it continues to “assess its internal operating model to deliver long-term value through a separate focus across its portfolio of brands”.
$ 1 = 1.3048 Australian dollars Reporting by Nikhil Kurian Nainan in Bengaluru; Edited by Daniel Wallis and Diane Craft
LONDON (Reuters Breakingviews) – In Samuel Taylor Coleridge’s “The Rime of the Ancient Mariner,” the protagonist mysteriously shoots an albatross which until now has acted as his ship’s lucky charm. In 2021, a similar fate will befall one of Britain’s golden geese: duty-free allowances for foreign tourists. The government’s decision to change benefits that may have provided a useful post-pandemic boost could become a symbol of its disorganized division from the European Union.
Bicester Village is not one of the UK’s most famous tourist attractions. But thanks to discounted Gucci bags and practical duty-free refunds, Chinese tourists in 2019 visit the small town of Oxfordshire as often as Buckingham Palace. To make it even more bizarre, the British government decided in September to abolish the tax cuts that fueled the phenomenon.
The UK’s obvious reason is to punish European tourists, thereby helping to pressure the EU for a more lucrative trade deal. UK bean counters argue that over 90% of visitors to the UK are not on a duty-free scheme, so few will miss it. And the UK’s Office of Budget Responsibility reckons it could raise around 500 million pounds in new tax revenue.
Yet nearly two-thirds of non-EU tourists are less likely to visit the UK without a rebate, the Global Blue survey shows. Tourists can still purchase tax-free items in the UK, but they have to pay to have them shipped back to their home countries, and insurance costs for luxury items like watches are high. The result, according to the Center for Economic and Business Research, is that arriving tourists can reduce expenses by up to 6 billion pounds.
It will be difficult to recoup these lost tax revenues. China has been trying to encourage duty-free spending at home, due to initiatives like the joint venture between Alibaba and Dufry. France, home to Hermès International and LVMH’s Louis Vuitton, has cut the minimum value of items that can be claimed VAT.
Covid-19 has hit retailers and airports that depend on tourism spending. Tax deduction prohibition of twisting knives. Some airports can lose up to 40% of their revenue, York Aviation research estimates. British trade agency Walpole said luxury retailers such as Burberry and Mulberry would be hit the hardest, as tax-free shopping accounts for as much as 60% of their sales. Overall, this is a story of avoidable economic losses – unlike Brexit in general.
– This is the Breakingview predictions for 2021. To see more of our predictions, click here
Reuters Breakingviews is the world’s leading source of agenda setting financial insights. As the Reuters brand for financial commentary, we dissect the big business and economic stories that are scattered around the world every day. A global team of about 30 correspondents in New York, London, Hong Kong and other major cities provides expert analysis in real time.
ROTHENBURG OB DER TAUBER, Germany (Reuters) – Germany’s tightening lockdown has eliminated one residue of seasonal frivolity: “Gluehwein” or processed wine, a Christmas market staple usually served in steaming mugs on chilly days on the square -alun cities across the country.
A ban on outdoor alcohol, starting mid-week, was announced on Sunday among measures to curb a second wave of the coronavirus.
Offenders will be fined.
While Germany’s famous Christmas market has been largely banned this year, many people can still get their hands on their Gluehwein, dropping masks to soak up in temporary open booths instead.
In the medieval town of Rothenburg ob der Tauber, for example, Gluehwein has recently become one of the few offerings sold around Market Square and its snow-covered wood-framed buildings. However, pedestrians are scarce while signs demanding masks are scattered on the centuries-old walls.
Some cities have restricted outdoor drinking, and reactions are growing. On Wednesday, German Chancellor Angela Merkel told parliament that the wine booth under consideration was incompatible with the COVID-19 measures.
“There is no social distancing or wearing masks while drinking Gluehwein,” said Thomas Boehle, an official in Munich.
Christoph Becker, head of the hospitality sector group in Cologne, has filed a lawsuit to appeal the ban.
“Just because some drivers don’t follow the speed limit doesn’t mean driving is prohibited,” he said.