Treasury Wine Estates to overhaul US business

USA – Treasury Wine Estates (TWE) will overhaul its US business after a review identified excess supply chain capacity and elevated inventory levels and expects a post-tax charge of A$558.4 million (US$394.4 million). 

The Penfolds and Lindemans owner said the review found excess capacity across vineyards, wineries and packaging facilities, alongside elevated inventory. TWE said the measures aim to accelerate the “improvement of future returns” from its Americas business as US wine demand softens. 

Following the review, TWE will reduce North Coast vintage make sizes from the 2026 financial year, including fallowing vineyards to reduce grape intake. The company will write down US inventory, predominantly bulk wine, which it expects to manage through bulk wine markets and internal reclassification. 

The initiatives will result in an additional A$558.4 million post-tax material item charge in fiscal 2026. The charge relates to non-cash write-downs of US-based assets and further impairment of brands. 

TWE said its review of the Americas remains ongoing and that advisers have been appointed to assess options across its brand portfolio and asset base. 

Chief Executive Officer Sam Fischer said the company was taking action to align supply with expected demand. 

“As we announced in June, we are taking proactive and decisive action to align supply to a rigorous model of future demand against the backdrop of an evolving US wine market,” Fischer said. 

“Both our Ascent transformation program and strategic review of potential options for the future of our US business are progressing well,” he added.  

“The underlying momentum in our business remains positive, with our brands delivering depletions growth ahead of their categories, led by Penfolds, DAOU and Frank Family Vineyards, and we expect to report F26 EBITS ahead of the guidance we shared in June.” 

Despite the charge, TWE said unaudited earnings before interest, tax, SGARA and material items (EBITS) for the financial year ended June 30 are expected to reach A$492.3 million, above its A$480 million to A$490 million guidance range. 

TWE reiterated its fiscal 2027 outlook, expecting EBITS to be at least equivalent to fiscal 2026. 

TWE said the Americas review is part of efforts to reshape the US business and address supply, inventory and asset levels in response to market conditions. 

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