Australia’s 2022 wine grape harvest has been picked. The effects of China tariffs on the Australian wine sector are likely to show through as a sharp fall in grape prices this year. We see a drop of at least 15% for red wine grapes. While difficult for growers, we expect an earnings benefit for Treasury Wines over the next three years. We estimate a cost saving from lower grape prices of $75-85 million, or 12% of EBITS by FY25e. There are a number of drivers for Treasury’s earnings including a recovery of higher margin channels, supply chain savings and lower grape prices. We forecast three-year EBITS CAGR of 10% to FY24e.