The Treasury Wine Estates Ltd (ASX: TWE) share price fell by 14.3% on Tuesday after the market learned of some difficult Chinese-related news.
What happened in China?
The wine business announced that the Chinese Ministry of Commerce has initiated an anti-dumping investigation into Australian wine exports into China.
Treasury Wine Estates said that it would co-operate with any requests it receives for information from Chinese or Australian authorities.
The company tried to reassure investors by saying that it has had a long and respectful relationship with China over many years with its team, partners, customers and consumers.
Management said the company remains committed to China as a priority market and will continue to invest in its Chinese business and its relationships with customers and consumers.
Treasury Wine Estates stated it will continue to build its premium and luxury brands, investing in the local operating model and team, and working with partners to enhance the wine category and grow its contribution to China.
The tensions between Australia and China are continuing to mount after China previously targeted barley and beef for Australia’s role in asking for an inquiry into COVID-19.
This news shows the peril of relying on a Chinese growth story. Investors may wish to look for other ASX growth shares with less reliance on China for growth.