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News Alert: Treasury Shakes Up U.S. Distributor Profile

January 30, 2018

Treasury Wine Estates has released its mid-year financial results two weeks ahead of schedule, and in the process has revealed significant changes to its distributor lineup.

Among the changes, Treasury is switching to a direct sales and distribution model in the California and Washington markets for its largest retail partners. For the on-premise and smaller retailers, TWE has appointed Classic Wines of California and Vehrs Distributing in Washington to handle its brands.

In Florida, TWE is implementing a new hybrid distribution model where it will directly manage relationships with its largest retail partners in collaboration with Breakthru Beverage Group. Breakthru will operate a full service distribution model for the remainder of the market, including the on premise channel, and independent and small chain retailers. TWE has previously been aligned with Southern Glazer’s in both California and Florida.

In a number of other states, TWE has also appointed new full service distributor partners. These include Breakthru Beverage Group in Illinois, Colorado, South Carolina and Minnesota; Johnson Brothers in Indiana, Hawaii, Iowa, West Virginia, North Dakota and South Dakota; Vehrs Distributing in Oregon; and Specialty Imports in Alaska.

TWE, which says the moves will improve efficiency and enhance margins across its Americas business, expects its new route-to-market changes to be implemented by the end of June.

Meanwhile, TWE’s Americas unit posted a 10% decline in net revenue to A$504 million ($407m) for the six months through December, mainly driven by its exit from the commercial segment of the business. TWE’s luxury and masstige ($10-$20) segments saw combined depletions growth of 13% for the period. EBITS was up 13% to A$100 million ($81m).—Dan Marsteller

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