Treasury Wine Estates cuts profit forecast amid US market weakness 

AUSTRALIA – Australian luxury wine company Treasury Wine Estates (TWE) has revised its full-year profit guidance downward to approximately US$770 million, down from an earlier estimate of around US$780 million.  

The downgrade comes as weaker consumer demand and economic uncertainty in the United States impact its premium wine sales. 

In a market update to the Australian Securities Exchange (ASX) on Tuesday, TWE cited “lower-than-expected Premium portfolio shipments in the US” as the primary reason for the revised forecast.  

The company pointed to declining wine category performance at price points below US$15 amid ongoing macroeconomic headwinds. 

The impact of economic disruption was compounded by tariffs introduced by former President Donald Trump on April 2, referred to as “Liberation Day” tariffs. These measures imposed a blanket 10% levy on all imports, contributing to global market volatility and wiping up to US$10 million off TWE’s projected annual profit.  

While TWE initially downplayed the effect of the tariffs, the recent challenges have proven more significant than anticipated. 

Adding to the complications, Treasury Wine Estates revealed that Republic National Distributing Company (RNDC), one of its key US distribution partners, will cease operations in California effective September 2.  

The California market accounted for around 25% of net sales revenue from TWE’s Americas division and roughly 10% of the group’s total net sales revenue in the first half of the financial year. 

Although the closure will not affect financial results for the current year, TWE has commenced evaluating new distribution options for its California portfolio.  

The company emphasized that its relationship with RNDC, which spans 25 US states, will remain intact outside of California.  

RNDC reaffirmed its commitment to supporting TWE’s portfolio in the remaining 24 states despite withdrawing from California, a move driven by the loss of several key supplier contracts, including Anheuser-Busch. 

TWE has made notable investments in the US market in recent years, particularly after China imposed tariffs on Australian wine exports during a period of diplomatic tension.  

In 2023, the company acquired California’s DAOU Vineyards in a US$1.4 billion deal, reflecting its focus on growth in the US luxury wine segment—defined as wines priced above US$30 per bottle.