Treasury Wine Estates has revealed plans to divest wines sitting under its commercial portfolio.
In an ASX filing issued today (6 August). the group said that the sale “predominantly” involves its commercial brands.
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The move follows on from its review of “the future operating model for its global portfolio of premium brands”.
Wines including Wolf Blass and Yellowglen, both acquired in 1996, Lindeman’s, snapped up 2005, and Blossom Hill, bought in 2015, are to be handed off, according to the filing.
In TWE’s fiscal 2024, these commercial brands made up under 5% of the company’s gross profit.
The group did not reveal information on a potential buyer, but noted that more detail on its “ongoing review” would be provided following the release of its full-year 2024 results on 15 August.
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By GlobalDataThe Penfolds producer said it expects its ‘Treasury premium brands’ (TPB) unit to book a cash impairment of A$229m ($148.37m) in its upcoming FY 2024, in light of the offload. It also expects to report A$115m from write-down of goodwill.
“The changes to the carrying value assessment reflect moderated top-line expectations as a result of challenging market conditions for Commercial wine, across all markets, and the underperformance of TPB’s brands relative to the category at these Commercial price points”, TWE said in the ASX statement.
It added: “These adverse trends have offset the benefits from TPB’s strategic focus to premiumise its portfolio, where it has delivered a three-year NSR CAGR of 10% for its priority Premium brands, which include Wynn’s, Pepperjack, Squealing Pig and 19 Crimes.”
TWE has been focusing in on its premium brands unit for some time. Earlier in June, the Melbourne-based group announced it had merged a new team focused on revenue growth into its premium-brands division as it looks to “unlock” growth for focus brands.
Its ‘global revenue growth’ team (GRG) was established by the group’s global chief revenue growth officer Angus Liley in 2023. It was tasked with “driving” revenue opportunities by setting out growth plans for current and future global brands, as well as working on innovation and consumer intelligence.
As of last month, Liley took over the TPB division as managing director from Peter Neilson. After 12 years at TWE, Neilson stepped down from TWE to “pursue new career opportunities”.
In July 2023, TWE indicated plans to shut its commercial Karadoc winery in Victoria due to rising costs and a dip in consumption of wine at sold under A$10 a bottle.
