People are drinking less wine and increasingly selecting from the higher shelves, but that doesn't mean Australia's biggest wine company will chuck its bulk brands in the discount bin.
Treasury Wine Estates this week sold Rosemount, Ingoldby and Secret Stone to the Oatley family, the latest in a series of unloaded discount brands as it focuses on its luxury labels to drive earnings growth.
But while attempts to sell names like Wolf Blass, Lindemands and Yellowglen had so far been unsuccessful, the wine giant was happy to wait for the right price, chairman John Mullen said.
"We're not going to just sell brands for $1 to get rid of them, as they don't fit the portfolio," he told shareholders at the group's annual meeting in Melbourne.
"We'll seek to sell them, but we certainly won't sell them for unrealistic amounts."
Tastes and the broader market were changing, with younger people in particular drinking less.
"The macro environment for alcohol beverage remains difficult, reflecting the combination of structural changes to consumption and cyclical factors, including cost of living pressures," Mr Mullen said.
"The luxury wine market continues to grow and so TWE’s move to rebalance the portfolio towards luxury as opposed lower end wines where the market continues to shrink, is bearing fruit."
After a more than $1 billion net loss in the recent financial year and TWE shares down around 70 per cent since 2019, some shareholders were less optimistic, with one asking how such a great Australian company had fallen so far, and another calling it a "rundown, has-been" company.
Falling global alcohol consumption, write downs in its US businesses, the bankruptcy of its biggest distributor there and unauthorised parallel sales into China had all impacted Treasury's bottom line.
"Well, of course, no one's happy with the year that has just passed," Mr Mullen said.
"However, TWE was and remains a great company, and is far from rundown."
The chairman also noted the importance of dividends to shareholders and that the decision not to pay one in 2026 had not been taken lightly.
"The board will consider resuming dividends as leverage moves towards our target level," he said.
Mr Mullen poured water on rumours the company was planning to carve out a separate ASX-listing for its successful Penfolds brand, with a slight caveat.
"We have no intention to pursue a separate listing from Penfolds at the moment," he said.
Investors seemed to take the meeting positively, pushing TWE's share price 1.2 per cent higher to $5.75 in early trade.
