Treasury Wine To Divest Commercial Portfolio

Treasury Wine Estates has announced plans to offload its commercial wine portfolio, including brands like Wolf Blass, Yellowglen, Lindeman’s, and Blossom Hill. The commercial stable accounts for less than 5% of gross profit at the company, which also revealed an impairment charge of A$290 million ($188m) after tax related to its global Treasury Premium Brands (TPB) division, in which the commercial labels are housed.

Treasury said the planned divestment reflects “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.” The company added that the tough trends have “offset the benefits from TPB’s strategic focus to premiumize its portfolio, where it has delivered a three-year net sales revenue CAGR of 10% for its priority premium brands, which include Wynn’s, Pepperjack, Squealing Pig, and 19 Crimes.” (Treasury defines Luxury wine as retailing at A$30-plus a bottle, Premium as A$10-$30, and Commercial as below A$10.)

Additionally, Treasury said unaudited EBITS before material items for its fiscal year ended in June are expected to be A$658 million ($427m), an increase of 12.8% against the prior year on a comparable basis. The group plans to further detail future plans for its global premium brands when it releases full-year results on August 15.—Daniel Marsteller

Tagged : Blossom Hill, Lindemans, Treasury Wine Estates, Wolf Blass, Yellowglen

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