Treasury Wine Estate this week dropped its guidance, saying its sales in China had been affected by "evolving consumption dynamics within the alcohol sector", in particular large-scale banqueting occasions.
Treasury Wine saw some signs of improvement in August and a return to grow in September, and had been pinning its hopes on China's Mid-Autumn Festival period, a harvest festival that in 2025 fell in early October.
"Unfortunately, the early signs of improvement were not sustained," chairman John Mullen told shareholders at the company's annual meeting on Thursday.
"While we do not yet have definitive numbers from the festival sales period, it is becoming clear from the preliminary data that our depletions in China for fiscal 26 are going to fall well below expectations if these trends continue."
Treasury Wine Estates was looking to re-allocate product to other markets but was doing so carefully to ensure it did not increase the risk of parallel imports into China, Mr Mullen said.
"We remain very confident in the long-term growth potential for Penfolds in China and globally," he said.
Still, Treasury Wine Estate has also paused a $200 million share buyback announced in August that's just $30.5 million complete.
The company says pausing the buyback is "appropriate and prudent" until there's greater clarity around trading conditions and expectations.
Mr Mullen told shareholders the company still had a strong balance sheet, world-class brands and assets, exceptional people and a clear long-term strategy.
Beijing removed its tariffs on Australian wine imports in March 2024 following high-level diplomacy by the Albanese government.
China had imposed 200 per cent levies in 2020 at the height of the dispute between the two countries.
At noon, TWE shares changing hands at $6.235 - up 1.2 per cent on the day, but down more than nine per cent on the week.
They hit a nearly decade-low on Monday, the day the company pulled its guidance.
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