Penfolds owner shifts focus to luxury as wine sales decline

Summarised from 2 outlets · Updated 15 Oct, 02:33 · Archive

Treasury Wine Estates, Australia's biggest winemaker, is selling discount brands and focusing on luxury labels to offset falling consumption and a weak US market.

Treasury Wine Estates, Australia's biggest winemaker, has sold three discount wine brands to the Oatley family as it restructures its portfolio towards luxury labels. Attempts to sell other discount brands including Wolf Blass, Lindemans and Yellowglen have so far been unsuccessful, but the company is willing to wait for acceptable offers. Chairman John Mullen told shareholders at the company's annual meeting in Melbourne that the company would not sell brands for unrealistic prices simply to remove them from the portfolio.

The shift reflects broader changes in the market. Younger consumers are drinking less wine overall and increasingly choosing premium products over budget options. Mullen said the macro environment for alcohol beverages remained difficult due to structural changes in consumption patterns and cost of living pressures. The luxury wine market continues to grow, he added, even as the lower-end market shrinks.

Treasury Wine has faced significant challenges, reporting more than a billion dollar net loss in the recent financial year. The company's share price has fallen around 70 per cent since 2019. Problems have included falling global alcohol consumption, write-downs in its US businesses, the bankruptcy of its biggest US distributor and unauthorised parallel sales into China.

How it is being reported

• Penfolds owner in no rush to sell discount labelsAustralia's biggest winemaker continues to look to luxury to turn its fortunes around, but changing drinking habits and a tough US market pose challenges.Perth Now · 15 Oct, 01:57
• Penfolds owner in no rush to sell discount labelsAustralia's biggest winemaker continues to look to luxury to turn its fortunes around, but changing drinking habits and a tough US market pose challenges.The West Australian · 15 Oct, 01:57

In this story: Treasury Wine Estates · Oatley family · John Mullen · Melbourne · China · United States

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