Treasury Wine Estates (TWE) is a unique global wine company with a leading international portfolio of new world wines.Treasury Wine Estates is an Australian-based global winemaking and distribution business. It is headquartered in Southbank, Melbourne, Victoria, and until a demerger in May 2011, was the wine division of international brewing company Foster's Group.
Treasury Wine Estates traces its roots back to the establishment of several New World wineries in the 19th century. These include Lindeman's and Penfolds in Australia, and Beringer Vineyards in the United States.
However, the wine division performed poorly, often draining cash from the highly profitable brewing business. In 2008, Foster's CEO Trevor O'Hoy resigned. By 2011, the company had written down the value of the wines division by half since it acquired it at the peak of the market, leaving it worth about A$3.1 billion.
Further write-down of stock worth around A$160 million took place in 2013, followed by the redundancy of David Dearie and appointment of interim chief executive Warwick Every-Burns. This left the business in a more fragile state as shares dropped almost A$2 to just above A$4. Treasury has since worked with Accolade Wines to promote bottling efficiency, strengthening its performance in Asia, Australia, New Zealand and Europe.
Foster's began to build its wine division from 1995 onwards. Through acquisition, it built the division into one of the world's largest winemakers. By 2005, Beringer Blass was the seventh largest producer of wine in the United States. The same year, Fosters acquired the Australian wine-making group Southcorp, adding famous brands including Lindeman's, Penfolds and Rosemount, and around A$1 billion to revenues.[citation needed]
However, the wine division performed poorly, often draining cash from the highly profitable brewing business. In 2008, Foster's CEO Trevor O'Hoy resigned. By 2011, the company had written down the value of the wines division by half since it acquired it at the peak of the market, leaving it worth about A$3.1 billion.After further difficulties in the division resulted in an additional A$1.3 billion write-down, 99 per cent of Fosters Group shareholders agreed at a meeting in Melbourne on 29 April 2011 to split Fosters Group business into separate brewing and wine companies. Treasury Wine Estates officially became a separately listed company the following month, with David Dearie as its chief executive. The scheme of arrangement for the demerger of Treasury Wine Estates from Foster's Group was implemented on 20 May 2011.
Further write-down of stock worth around A$160 million took place in 2013, followed by the redundancy of David Dearie and appointment of interim chief executive Warwick Every-Burns. This left the business in a more fragile state as shares dropped almost A$2 to just above A$4. Treasury has since worked with Accolade Wines to promote bottling efficiency, strengthening its performance in Asia, Australia, New Zealand and Europe.Since about 2015, Treasury has reportedly been reducing its presence in the British market to concentrate on Asia, where margins are much higher.
In July 2016 Treasury Wine Estates slimmed down its wine portfolio, announcing the sale of 12 'commercial' wine brands in the United States. The sale of the US brands represents around one million cases of wine.
The business is divided into four global regions: Australia and New Zealand; The Americas; Europe; and the Middle East, Africa and Asia. Globally the company manages over 12,000 hectares of vineyards with 3,500 employees in 12 countries, with sales totalling over 35 million cases of wine annually, generating revenues of A$2 billion.
Source: Reuters
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