Multi-brand winemaker Treasury Wine Estates has been forced to deny persistent rumours it is still planning to demerge its luxury Penfolds brand from its value and mid-market wine brands.
The company announced in April it was considering building shareholder value through a demerger, however in November it told the company’s annual general meeting that it had paused work on a potential demerger.
Now it has been forced to respond to a media report that it was putting the finishing touches to a demerger.
The company told investors: “TWE reiterates that it has formally paused work on a potential demerger of its Penfolds brand, and further that it is not currently considering a demerger of any brands/businesses within its portfolio.”
Penfolds owns numerous brands including Australian brands Lindemans, Wolf Blass, Seppelt, Wynns Coonawarra, Pepperjack, Rawson’s Retreat and Rosemount Estate.
Speculation has been fuelled by the fact Penfolds makes up 10 per cent of TWE sales but accounts for 50 per cent of profits.
TWE also said that it was assessing internal operating models to deliver long-term value through a separation of focus across its brand portfolios.
“These assessments remain ongoing.”
The logic of a demerger was that it would allow separate management teams to focus on building brands in the luxury and mass market segments, which require different strategies.
Picture: Treasury Wine Estates
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