Australian wine giant Treasury Wine Estates (TWE) is expecting to book an impairment charge on its US-based assets amounting to at least A$687.4m ($450m).
The Penfolds brand owner said today (1 December) brands like Daou and Matua were growing faster than the market but it had decided to put in place “more conservative long-term market growth assumptions” as a result of “further moderation in US wine category trends”.
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TWE said the impairment would cause “reduced long-term earnings growth rates”, affecting the value of its Treasury Americas and Treasury Collective divisions.
Treasury Americas manages sales of TWE’s US-based brands as well as its other labels in the Americas region. Treasury Collective is the new name for the group’s “premium” wine division, which includes the brands 19 Crimes, Cali by Snoop and Squealing Pig, as well as “a portfolio of regional and commercial brands”, according to TWE.
TWE expects the impairment will see “at least all goodwill”, equating to A$687.4m, being written off in its Americas region, with other assets potentially being impacted.
The final impairment charge as well as its allocation to assets will be determined as part of the company’s 2026 interim results.
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By GlobalDataThe move, TWE said, follows a disclosure in its annual report in August of a reduction in future cash flows of 11% a year in the Americas business that “would reduce impairment headroom to nil”.
TWE pulled its fiscal 2026 earnings guidance in October, citing an “uncertain outlook” for Penfolds and its Treasury Americas business.
“As a result of the uncertain outlook in relation to Penfolds and Treasury Americas, TWE has formed the view that it is no longer appropriate to retain its guidance for EBITS growth at a group level in F26,” the Lindemans brand owner said in a trading update at the time.
For its 2026 fiscal year, TWE had anticipated “low- to mid-double-digit EBITS growth” for Penfolds but has now scrapped this forecast. It has also withdrawn its 15% EBITS growth expectation for the brand in fiscal 2027.
It said it was unable to provide revised guidance due to “the uncertainty that remains as to the outlook”.
The group then noted that shipments of its Treasury Americas business in its first quarter of 2026 had been hit by the impact of US distributor RNDC’s exit from California, which became effective in September.
Back in August, TWE said it expected a A$50m hit to net sales revenue of its Treasury Americas business in its fiscal 2026 from changing distributors in California.
The company appointed Breakthru Beverage Group as its new distributor for the US state in July.
In its fiscal 2025 results, TWE said that “modest” EBITS growth in F26 for Treasury Americas was dependent on offsetting the effect of lower shipments in California through talks with RNDC.
