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News Alert: RNDC To Handle Over One-Third of Treasury Wine’s U.S. Business

May 3, 2021

Treasury Wine Estates has announced an expansion of its partnership with second-ranked U.S. distributor Republic National Distributing Co. (RNDC). The two companies’ new long-term deal covers nine markets, including California, Texas, Louisiana, Oklahoma, Kentucky, Mississippi, Utah, Wyoming, and Nebraska. TWE and RNDC were already linked in Michigan, Georgia, and New Mexico.

With the new agreement, RNDC will now handle more than one-third of Treasury’s U.S. business. Southern Glazer’s has previously served as TWE’s distributor in the affected markets, except for California, where the company was aligned with Bronco/Classic Wines.

The move follows Treasury’s licensing of about 4.2 million cases of annual commercial wine volume to The Wine Group in March. “With our divestiture of commercial wine brands, we decided to reevaluate our business needs to position our company for future growth,” said TWE Americas president Ben Dollard. “Over the past several years, we have built meaningful relationships with key retailers. Our decision to partner with RNDC presents us a terrific opportunity to cultivate our trade partnerships, to fast-track growth, execute our plans, and build long-term value.”

Treasury Americas saw sales slip 7.2% to A$535 million ($414m) year-on-year in the six months through December, as EBITS declined 2.7% to A$83 million ($64m), but the company noted that strong growth in retail and e-commerce channels allowed the Americas business to increase sales 17% and EBITS 70% compared with the previous six-month period.

Among Treasury’s key brands in the U.S., both 19 Crimes and Matua recently earned Impact “Hot Brand” awards for their 2020 performances, increasing 34% to 2.2 million cases and 19% to 730,000 cases respectively. Additionally, the company recently introduced a luxury-end California Collection under its flagship Penfolds brand.

Dollard sees further opportunities ahead, now that the company has streamlined its portfolio and addressed its route to market. “We are in a position of growth and our premium and luxury wines are outpacing the market,” he said. “Our innovation continues to be a highlight. Specifically, 19 Crimes and the Snoop Dogg collaboration, and the launch of the Penfolds California Collection are great recent achievements.”—Daniel Marsteller

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