Andy Morton

just On Call - Treasury Wine Estates backs new CEO as flak flies

By | 21 February 2014

Clarke will start at the end of March

Clarke will start at the end of March

Treasury Wine Estates has defended its decision to appoint a CEO with no alcohol retail experience, saying new head Michael Clarke is a “heavy hitter” with a proven track record.

In a call with journalists after first-half results were announced yesterday (20 February), TWE chairman Paul Rayner conceded that Clarke had not worked in the wine trade previously, but flagged that he “has worked at a very senior level” in “complex” businesses. Clarke, whose appointment was confirmed yesterday, spent 12 years with the Coca-Cola Co and headed up Kraft Foods' European business.

He replaces David Dearie, who left TWE in September, and will start on 31 March.

Rayner said: “We did have a couple of candidates on the short list that had wine experience, but in terms of their track record and in terms of their ability we thought ... that Mike was very clearly the appropriate guy.”

Rayner also said the appointment will be long-term, and that Clarke plans to move his family from London to Sydney, where TWE is headquartered. 

“He is committed to the growth prospects of this company and he is committed to the long-term prospects of this company,” Rayner said.

In an another call yesterday, analysts attacked Clarke's lack of experience, with one saying his previous employer Kraft “isn’t exactly an agricultural producer, it doesn’t exactly milk cows”, according to Australian industry website The Shout.

Rayner said: “Treasury Wines ... has been run by wine people for 12 to 15 years. You draw your own conclusions as to how much success they've had. I think people would say it hasn't been that great.”

In first-half results, TWE announced a 37.6% drop in reported first-half earnings before interest, tax, SAGRA, and material items (EBITS), as sales came in flat. However, the company's net profits jumped, thanks to a tax benefit. 

TWE has struggled after a AUD160m (US$145.7m) stock writedown in the US last year. The company flagged up the writedown in its announcement around Dearie’s departure.  

Defending himself from analysts' criticism, including suggestions he should be removed from the board, Rayner said: “I think the board has acted very appropriately over the last 12 months. We had some challenges and we dealt with them.”

Expert analysis

Remy Cointreau : Consumer Packaged Goods - Company Profile, SWOT & Financial Report

Canadean's "Remy Cointreau : Consumer Packaged Goods - Company Profile, SWOT & Financial Report" contains in depth information and data about the company and its operations. The profile contains a company overview, key facts, major products and services, swot analysis, business description, company history, key competitors, financial analysis, recent developments, key employees, company locations and subsidiaries as well as employee biographies.

Sectors: Company results, HR – personnel, Wine

Companies: Treasury Wine Estates

View next/previous articles

Currently reading -

just On Call - Treasury Wine Estates backs new CEO as flak flies

There are currently no comments on this article

Be the first to comment on this article

Related research

Treasury Wine Estates Ltd in Wine (World)

Treasury Wine Estates has faced serious challenges since its spin-off from Foster’s Group in 2011. The US, which was a key component of its turnaround plan, has thus far failed to pay dividends. In 2013, the company was put in the extremely uncomfort...

Global Wine Market: Merger & Acquisitions December 2013

The report provides a review of the mergers and acquisitions (M&As), partnering deals, and agreements entered into by companies active in the global wine market during December 2013....

Wine in Singapore

Wine in Singapore industry profile provides top-line qualitative and quantitative summary information including: market share, market size (value and volume 2008-12, and forecast to 2017). The profile also contains descriptions of the leading players...

Related articles

US: Treasury Wine Estates appoints new Beringer brand chief

Treasury Wine Estates (TWE) has recruited a former E&J Gallo and Heinz executive to take responsibility for its Beringer wine brand domestically and globally.

just For Subscribers - The week in drinks

Here are the ten most viewed, subscriber-only items on just-drinks this week:

just the Round-Up - The week in drinks

The top ten stories published on just-drinks this week:

Read further items in this columns

just On Call

We report back from drinks companies' conference calls post-results announcement.

just-drinks tagline

Not a member? Join here

Decrease font sizeDecrease font sizeDecrease font size Increase font sizeIncrease font sizeIncrease font size Comment on this article Email this to a friend Print this page