AUS/US: Treasury Wine Estates writedown "frustrating" - regional head
TWE released its FY results yesterday
Treasury Wine Estate's costly inventory writedown in the US is “frustrating”, a regional head of the company has admitted to just-drinks.
However, TWE's MD for Europe, Middle East and Africa, Andrew Carter, said the company has taken “the right and brave decision” to destroy out-of-date stock after over-ambitious forecasts for new products. The AUD154.7m (US$139.7m) writedown pushed TWE's full-profits, released yesterday, down by 53%.
“When you have old and aged wine in a distributor network, you have to tackle that. You can't build brands with old-aged wine,” Carter said in an interview with just-drinks.
He added: “It's frustrating for all of us... The Americas challenges are well documented - they go back over a period of time and I think we've taken the right and brave decision to address and issue that has been there for a while.”
TWE announced in July it will clear “excess, aged and deteriorating” stock in the US.
Carter yesterday also said TWE has seen some signs of a wine slowdown in China because of gifting restrictions that have already hit spirits sales. But he added that Asia's FY performance was still strong, with a 20% volumes lift driven by “unprecedented levels of demand” (volumes +39%) for Penfolds in Hong Kong & China.
Strong UK sales at the end of the financial year (volumes +14%), along with the start of a recovery in Nordic countries, have also given Carter confidence for Europe going forward, he said.
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