ng to the Sydney Morning Herald, the troubled producer of Penfolds and Wolf Blass is wiping the amount (8% of its assets) from its 2014 full year fiscal profit following a slowdown of global commercial sales and overpayments for previous acquisitions.New chief executive, Michael Clark, has said that 2015 is to be a “reset” year for the company and the write-off is coming hand-in-hand with a restructuring of the entire business model, including cutting 5% of its workforce and changing the release date of its leading Penfolds labels from March and May to October to better manage allocations.
In a statement to the Australian Stock Exchange this morning (25 June), TWE said: ”An October release also means the company is better placed to manage allocations and inventory levels with key customers around the world throughout the year – in contrast to selling through the release in the final quarter of each fiscal year.”
“This change places the consumer at the heart of our business model with Penfolds wines now more readily available in the lead-up to key festive periods including Thanksgiving, Christmas, Chinese New Year and Easter,” added Clarke.
Treasury also announced there was a to be a “clearer structural divide” between its commercial wines and its “luxury & masstige” brands such as Penfolds Grange.
Under this model, Angus McPherson, currently Australian general manager, will lead the team dealing with the commercial wines and Simon Martin, now chief marketing officer, will head up the luxury portfolio.
The Asian, European, Middle Eastern and African regions will now be managed separately to Australia and New Zealand.
Clarke has said he will increase consumer marketing spend by 50%, using savings of AU$35m he intends to make through cost-cutting measures.
He said: We have already taken significant steps to reset consumer marketing investment, our cost base and business model and over the coming year we must fully realise the benefits of these changes,’
Treasury has been in trouble for some time now and hit a nadir at the beginning of the year when its fortunes fell so low that trading in its shares was suspended.
Since then there have been rumours it was going to sell off one of its leading US brands, Beringer, in an effort to balance the books.
Pernod Ricard was once touted as a potential buyer but this was rejected by the French multinational. US equity firm KKR offered AU$3bn just last month but this was rejected by TWE’s board.
