Treasury Wine Estates dumps planned sale of cheap labels
Wolf Blass, Yellowglen, Lindeman’s and Blossom Hill will remain in Treasury Wine Estates’ portfolio after offers for the brands “did not represent compelling value”.
Treasury Wine Estates has backed away from selling its portfolio of ‘commercial’ wines after determining offers put forward for the package of cheaper brands did “not represent compelling value”.
Instead, the company said “retention is the best course of action” for the portfolio which includes South Australia’s Wolf Blass and other Australian brands Yellowglen, Lindeman’s and Blossom Hill.
Treasury Wine Estates announced in August 2024 that it would ditch the commercial portfolio to instead focus on its premium wines, noting at the time that the commercial brands represented less than five per cent of its gross profits for FY24.
The latest announcement came as part of the company’s first half 2025 results, with Treasury Wine Estates announcing a 32.5 per cent uplift in profits to $220.9 million.
Earnings grew 35.1 per cent to $391.4 million driven by its South Australian luxury brand Penfolds.
The company described Penfolds’ performance as “outstanding”, with strong growth in shipments to Asia – China in particular.
Net sales revenue for the company’s premium and commercial portfolios declined in the first half by 4.9 per cent, which it said reflected “continued softness in consumer demand for wine at lower price points”.
As for the re-establishment of Penfolds in China, the company said plans were “progressing in line with expectations, with strong customer demand throughout 1H25”.
“Penfolds brand health continues to strengthen in China, with awareness and consumption metrics trending higher, reflecting the success of re-establishing distribution and the effectiveness of targeted brand investment,” Penfolds said.
“While alcoholic beverage market conditions have been mixed in China, wine category trends were positive in 1H25, driven by strong consumer demand during the December quarter.
“TWE remains confident in the long-term growth opportunity for Penfolds in China, as reflected by the reiteration of guidance for Penfolds today.”
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The company expects total earnings for the full year to land at about $780 million – the lower end of guidance.
TWE CEO Tim Ford said the interim performance highlighted “the benefit to the quality of earnings and key metrics from our multiyear transformation to a Luxury-led business”.
“Calendar year 2024 has been a year of significant and successful change for TWE,” TWE said.
“Our team has absolute clarity on our portfolio and execution priorities, with Penfolds and the Treasury Americas Luxury business the clear drivers of our future growth, with our global premium business playing a critical role to power and support this growth agenda.”
