Treasury Wine Estates targets higher-priced wine sales

Treasury Wine Estates targets higher-priced wine sales

The head of Foster's Group's wine arm, Treasury Wine Estates, has said the firm needs to up its premium focus in the US in order to improve earnings, according to a report.

Treasury Wine Estates intends to put more resources into marketing wines priced above US$10, David Dearie reportedly told journalists today (13 October) at the opening of the firm's upgraded Coldstream Hills winery in Australia. He added that higher-priced wine would also offer some protection from the strong Australian dollar (AUD) against the US$.

The AUD rose to more than US$0.99 for the first time in more than a quarter of a century last week. Economists expect the two currencies to reach parity by the end of the year, which could further damage Australian wine exporters' earnings.

Foster's Group blamed currency for a 27% drop in earnings before interest, tax and special items at Treasury Wine Estates in the fiscal year to the end of June.

David Dearie's comments on premium wine follow an upbeat assessment of the US wine market from rival firm Constellation Brands. Sales of wine priced below $5 have seen little growth in 2010, while demand for wines priced between $10 and up to $25 has been growing in double-digits, said the Robert Mondavi wine producer earlier this month.