Leading Australian winemaker Treasury Wine Estates has announced a $450m (£340.4m) non-cash impairment to the value of its US-based assets.
The Penfolds brand owner said that – while several of its “larger brands” including DAOU, Frank Family Vineyards and Matua were continuing to “grow ahead of the market” – it had elected to apply “more conservative long-term market growth assumptions” in light of “further moderation in US wine category trends”.
TWE withdrew its full-year earnings guidance in October, citing slower than expected demand in markets including the US and China.
The Melbourne-based company spent more than $1.2bn on acquiring Frank Family Vineyards and DAOU from 2021 to 2023 after Chinese tariffs on Australian wine forced it to look to new markets for growth.
CEO Sam Fischer is set to visit the company’s US operations next week, having just returned from China.
TWE is far from the only drinks giant struggling to adapt to leaner times as consumers cut back on alcohol consumption.
Vinarchy, the wine group formed after the merger of Accolade Wines and Pernod Ricard’s Strategic International Wines division in April, has announced plans to cull non-core and low volume brands from its portfolio.
“We are…rationalising our low volume, non-core labels that no longer resonate with consumers or align with our growth plans,” Vinarchy boss Danny Celoni told The Grocer last week.
Celoni, who took charge at Vinarchy in May, declined to say exactly how many brands the group could look to retire or sell. Reports in local media in Australia suggested up to 60 brands – around 40% of its portfolio – could be on the chopping block.
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