Australia’s Treasury Wine drops planned sale of cheaper brands, cuts profit guidance

By Byron Kaye and Sherin Sunny, Reuters | February 13, 2025

Bottles of Penfolds wine are on sale at a wine shop in central Sydney August 4, 2014. REUTERS/David Gray/File Photo
Bottles of Penfolds wine are on sale at a wine shop in central Sydney August 4, 2014. REUTERS/David Gray/File Photo

Penfolds wine producer Treasury Wine Estates (TWE.AX), opens new tab pulled the sale of its cheap drinks division after failing to find an attractive offer and cut its prediction for annual profit, sending its shares tumbling.

The division’s weak results and outlook soured an otherwise upbeat first-half result for Australia-listed Treasury as exports to China roared back to life after the end to three years of crippling tariffs imposed by Beijing.

Treasury had planned to offload budget labels including Wolf Bass and Lindeman’s last year amid a global trend of young drinkers turning away from alcohol. But “the offers received for these brands did not represent compelling value and therefore their retention is the best course”, it said on Thursday.
Net profit excluding one-off items jumped 33% to A$239.6 million ($150 million) in the six months to end-December, just short of the average analyst forecast from data aggregator Visible Alpha.

Bottles of Penfolds Grange wine and other varieties, made by Australian wine maker Penfolds and owned by Australia's Treasury Wine Estates, sit on shelves for sale at a winery located in the Hunter Valley, north of Sydney, Australia, February 14, 2018. REUTERS/David Gray/File Photo
Bottles of Penfolds Grange wine and other varieties, made by Australian wine maker Penfolds and owned by Australia’s Treasury Wine Estates, sit on shelves for sale at a winery located in the Hunter Valley, north of Sydney, Australia, February 14, 2018. REUTERS/David Gray/File Photo

That owed much to the first full reporting period of exports to China since 2020 and the contribution of recently-bought U.S. winery business DAOU.
But pre-tax profit from its “premium brands” unit, which includes its cheaper wine labels, halved, partly “reflecting softness in consumer demand for wine at lower price points”.

Citing reduced expectations for the unit, the company now expects pre-tax profit of about A$780 million for the financial year ending in June. That compares with an earlier estimate of A$780 million to A$810 million.
Treasury shares lost 4% by midsession, having fallen as much as 8% at one point as analysts downgraded their forecasts in line with the new guidance. The overall market (.AXJO), opens new tab was flat.

“With the company deciding not to sell its commercial portfolio, (the premium brands business) might be a drag on group earnings for some time,” Citi said in a note.

UBS said the guidance downgrade was “disappointing but somewhat reflected in share price”. The stock is down 4% compared to a year ago while the broader market has gained 12%.

Treasury declared an interim dividend of 20 Australian cents per share, compared with 17 Australian cents last year.

(US$1 = AU$1.5929)

Que sera Bloody Syrah: How a lockdown collaboration turned into a gin world first

Gianina Schwanecke, Stuff| 12:24, Aug 11 2022

Napier’s iconic National Tobacco Company factory on Ossian St in Ahuriri has gone from one vice to another. It is now home to a brewery, urban winery and, more recently, The National Distillery Company.

Blair Nicholl is doing the seemingly impossible, turning Hawke’s Bay-grown grapes into wine and gin.
Blair Nicholl is doing the seemingly impossible, turning Hawke’s Bay-grown grapes into wine and gin.

It is there that Blair Nicholl is doing the seemingly impossible, turning Hawke’s Bay-grown grapes into wine, then into gin.

A bartender by trade, he has seen firsthand the “ebbs and flows” of the wine and craft beer industries.

He says that New Zealand is one of the biggest wine exporters to the United States and could soon be the powerhouse of the spirit industry.

“It’s what the New Zealand spirits industry has got ahead of them if we band together.”

Nicholl’s foray into distilling came when he, best friend, and business partner Ricardo Reis made a gin using botanicals found in women’s luxury beauty products for a Wānaka event in 2018. Their gin caught the eye of Cardrona’s head distiller, who invited them for a tour.

Bloody Syrah is available exclusively direct from the National Distillery Company.
Bloody Syrah is available exclusively direct from the National Distillery Company.

They relocated to Napier, where Nicholl began distilling from his kitchen. A chance opportunity brought them to the building that had been on his vision board for ten years.

Like the dynamic duo, the owners were from Kāpiti and eager to see what these “Kiwi blokes with a dream” could do.

In early 2020, Nicholl and Reis found themselves in New York – dressed in jandals and T-shirts despite the cold – promoting their gins alongside New Zealand Trade and Enterprise.

“We stood out because we don’t take ourselves too seriously, but we’re deadly serious.”

Interest was growing in their product, and they would soon go on to win many accolades and awards in spirit-making competitions, beating big brands such as Beefeater, Bombay Sapphire and Tanqueray.

A bartender by trade, Nicholl has seen firsthand the “ebbs and flows” of the wine and craft beer industries.
A bartender by trade, Nicholl has seen firsthand the “ebbs and flows” of the wine and craft beer industries.

But when Covid-19 hit, the pair “thought the National Distillery dream was over,” Nicholl says.

Bloody Syrah is available exclusively direct from the National Distillery Company.

With no means to sell alcohol, he and Reis began making hand sanitiser using grapes from Clearview winery, owned by long-time friend Tim Turvey, where the pandemic had also brought production to a near halt.

While it allowed them to keep the business going, it was terribly boring for a creative like Nicholl.

Then he got the idea for what became known as Bloody Syrah: a gin made from wine.

“I’m all about trying things that people haven’t done before or say can’t be done.”
“I’m all about trying things that people haven’t done before or say can’t be done.”

“Wine is my first love. It’s something I’m extremely passionate about,” Nicholl says.

But he thought he could go a step further.

Using grapes from the coastal vineyard, Nicholl and Reis made a syrah, aged it in barrels, and played around distilling it into a clear, neutral spirit. Then they added the gin botanicals, distilled it again, put it back into oak, and left it for 12 months, turning it amber.

“We were trying to capture white pepper, and intense berry and earthy tones – the type of syrah that Hawke’s Bay is famous for.”

They bottled about 130 all up, corked and waxed, also like wine. The label draws inspiration from Penfolds, one of Australasia’s oldest wineries, and includes a dedication to Turvey.

Nicholl isn’t sure if his syrah gin is a world first, but it might well be, and it is certainly something he is happy to cross off his bucket list.

“I’m all about trying things that people haven’t done before or say can’t be done.”

At 44% alcohol by volume (ABV), Nicholl describes Bloody Syrah as the “cognac of gins”.

“Sit on one of these at a dinner party, and you only need one or two to be the life of the party. As long as Tim Turvey and myself aren’t there,” he laughs.

Australia’s 52 top wineries: the 2021 list

Check out the wildlife
Check out the wildlife

Huon Hooke, June 5, 2021, The Sydney Morning Herald’s wine writer has released his Australia’s 52 top wineries: the 2021 list.

Bushfires, drought, export problems, a pandemic … the past year has thrown many challenges at Australian winemakers. Remarkably, though, their output quality has remained high. Here, Huon teams up again with The Real Review to bring you the country’s top producers.

Fifteen different wineries feature this year that weren’t in 2020’s Top 52, but while that means 15 from last year didn’t make it, there’s a cigarette paper between them, as the standard is so high.

Check out The Real Review‘s full list of more than 400 top wineries and for Good Weekend’s top 52 from that list.

A quick view of the top 10 include:

  1. YARRA YERING Yarra Valley, Vic.
  2. PENFOLDS Barossa Valley, SA.
  3. YALUMBA Barossa Valley, SA.
  4. CULLEN Margaret River, WA.
  5. WINE BY FARR Geelong, Vic.
  6. LANGMEIL Barossa Valley, SA.
  7. SEPPELTSFIELD Barossa Valley, SA.
  8. CRAWFORD RIVER Henty, Vic.
  9. POOLEY Coal River Valley, Tas.
  10. MOUNT PLEASANT Hunter Valley, NSW.

Wineries from the list to have presented to the club include:

  •     2. Penfolds – Sept 2020, Apr 2014
  •     3. Yalumba – Oct 2018
  •   10. Mount Pleasant – Sept 2017
  •   14. Tyrrell’s Wines – Apr 2010
  •   17. Wynns Coonawarra Estate – Aug 2012
  •   21. De Bortoli – Sept 1996
  •   29. Peter Lehmann – Jun 2017
  •   70. Taylors – Jun 2015
  •   82. Brown Brothers – Jun 2015, Apr 2012
  • 139. McWilliam’s – Sept 2017, Mar 1985
  • 158. Serafino Wines – Aug 2016
  • 228. Elderton – Aug 2016
  • 249. Grant Burge – Oct 2013