Treasury Wines accelerates premiumisation, closes Victorian winery

Treasury Wine Estates, the maker of Penfolds, is accelerating its move towards premium and luxury brands, announcing adjustments to its operating model and organisational structure.

As well as announcing a stronger focus on ‘priority brands’ Wynns, Pepperjack, Squealing Pig and 19 Crimes, the company also revealed it would close a Victorian winery used to make budget products.

The company will close the winery in Victoria’s north-west town of Karadoc and sell two vineyards in response to falling sales of commercial products.

“The market trends and consumption outlook for commercial wine…remains challenges.

“In recent years this has led to further declines in…lower margin commercial portfolio volumes, a market dynamic that is expected to continue in the future.

“In addition, the ongoing inflationary environment, particularly for packaging materials, is expected to place upward pressure on TWE’s cost of goods ij FY24.”

Treasury announced a review of its commercial wine supply chain with a view to reducing total cost of goods sold.

It would also explore further divestiture and rationalisation of assets.

The company’s high-end focus has seen premium and luxury wines climb to reach 60 percent of the company’s gross revenue, as well as achieving a 13 point improvement in revenue per case sold.

The Karadoc winery primarily produced wine sold for less that $10 a bottle and branded as 19 Crimes and Wolf Blass

Picture: Treasury Wine Estates

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