The analysis above isn't from an operations perspective. Losing quarter of the revenue doesn't mean the company will still make 3/4 of its profit.
There are fixed costs and variable costs. There will still be the same amount of vines, land and people to look after. So most costs are fixed, there isn't a lot of flexibility in the COGS.
Say gross profit was 25% of revenue and there is no reduction in costs. Then when 25% of the revenue is lost profit goes to zero.
bacci
What is TWE Worth Ex-China?, page-59
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