Treasury Wine Estates to pay US$43.7M to settle shareholder class action from 202

AUSTRALIA – Australian wine giant Treasury Wine Estates (TWE) has agreed to a settlement of A$65 million (US$43.7 million) to resolve class action lawsuits initiated by shareholders in 2020.  

The company announced the settlement in an Australian Securities Exchange (ASX) statement, stating it had reached a “principle agreement” to settle two lawsuits filed in April and May 2020. 

The legal proceedings were sparked after TWE revised its financial guidance for fiscal year 2020 (FY20) in January of that year, lowering its forecasted earnings before interest, taxes, and SG&A (EBITS) growth from 15-20 percent to 5-10 percent.  

By February 2020, TWE further warned that it would not meet even the revised target due to the “significant impact” of the Covid-19 pandemic on wine consumption, particularly in China. 

Ultimately, TWE’s EBITS for FY20 declined by 22 percent, amounting to A$533.5 million (US$358.1M), with EBITS margin decreasing by 4.0 percentage points to 20.1 percent.  

Shareholders accused the Penfolds maker of engaging in “misleading or deceptive conduct” and claimed the company breached its continuous disclosure obligations. 

Under the settlement terms, the A$65 million (US$43.6M) payment will be made to shareholders who acquired TWE shares between 30 June 2018 and 28 January 2020.  

However, TWE emphasized that it admitted no liability, stating that the settlement was a commercial decision made in the best interests of shareholders.  

The company explained that the agreement allows it to remain focused on its strategic goals. 

The settlement remains subject to final approval by the Supreme Court of Victoria and the completion of a deed of settlement. 

TWE has continued to show strong financial performance despite the challenges of 2020.  

For the year ended 30 June 2024, TWE recorded a 13.1 percent increase in total net sales revenues to A$2.73 billion (US$1.8B).  

EBITS for the group also rose by 12.8 percent to A$658.1 million (US$441.8M), driven by both organic growth and favorable market conditions.  

TWE also plans to consolidate its premium wine operations into a new Global Premium Brands division by July 2025. 

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