News: TWE UPDATE 1-Australia's Treasury Wine posts profit drop as China tariffs bite

(Adds details on earnings, background)

Feb 16 (Reuters) - Treasury Wine Estates (TWE) posted a 7.5% drop in first-half profit on Wednesday and missed market expectations, hurt by reduced shipments of its Penfolds brand to mainland China after Beijing slapped tariffs on Australian Wine.

The world's largest standalone winemaker has had to re-direct supply to the United States, Europe and domestically after a diplomatic row between Canberra and Beijing effectively closed the lucrative Chinese market to Australian wine.

The company's sales also took a hit due to the Omicron variant surge, but it said the impact was somewhat offset by strong growth in its Americas and premium brands businesses, both of which reported a 19% rise in their earnings before interest, tax, SGARA and material items (EBITS).

"Penfolds growth was particularly strong in Asian markets outside of Mainland China ... increasing distribution in Asia, domestic markets, Europe and the United States was a key execution highlight," the company said in a statement.

Treasury's net profit attributable fell to A$109.1 million ($78.01 million) in the six months ended Dec. 31, from A$118 million a year earlier. It missed a UBS estimate of A$172.7 million.

The Melbourne-based firm declared an interim dividend of 15 Australian cents per share, unchanged from a year earlier.

($1 = 1.3986 Australian dollars)