Decanter World Wine AwardsGaming billionaire ups stake in Treasury Wine Estates
- Tuesday 21 February 2012
The Packer family's investment fund, Ellerston Capital, has invested $123 million to raise its share in Treasury from 4.6 to 5%.
The move by Packer - son of the late Kerry Packer - pushed shares up 3% to $3.80 to hit a three-month high, leading to speculation in the Australian media that its wine industry's fortunes are improving.
Packer's move to increase its ownership stake in Treasury, which owns brands including Beringer and Penfolds, closely follows the publicly listed company's half year results.
It announced a 1.1m case, or 6.2%, drop in sales. While volumes increased more than 20% in Asia, it was not enough to stave off a slump in the UK, which has been the main source of the downturn in sales.
Treasury's chief executive David Dearie said: “It it weren't for UK sales falling, sales would have been flat.”
UK sales have been hard hit by the company's decision to abandon three for £10 promotions in favour of more profitable sales.
According to Dearie, duty and taxes on three bottles of Australian wine amounted to £7.41,“which clearly does not leave much room to make any sort of return,” he added.
The US also remains challenging, down 1.5% in the first half. However, this represents an improvement compared to the 11.2% fall it recorded last year.
Blush sales in the US “continue to have real challenges” with the focus now firmly on Moscato for Treasury. Red Moscato is “a very hot area right now” Dearie revealed, which will lead to the release of a number of Moscato-based wines in the second half.
Have your say!
Vim
February 23 20:15
It's amazing that some of these Russian Oligarchs are all into gaming. Gaming, then oil, now the wine business. When people are playing at this level, it's hardly like anyone else stands a chance to acquire these companies - grrrrr
Vim www.12x75.com
Paul
February 23 16:53
My experience with Treasury as a merchant was pretty poor, they hadn't a clue what stock was available, looks like things may be coming together slowly but at the higher end I get the impression they think there's more demand than supply especially for the Bin series wines mentioned above. I gather they plan a release campaign later this year for the Penfold's wines but I think there's too much competition out there for this position these days. In the past was none of the major brands that now form part of their portfolio have been seen in the UK for quite a few years!!
Could be an uphill struggle
Zoeldar
February 22 20:31
Dearie talks about Red Moscato...hmmm, I think I understand the problem...
Z
DJ Sellors
February 22 12:43
No wonder UK sales are down. It is almost impossible to find mid-range Penfolds wines (Bin 389, 138, 128,28, 407 etc) anywhere these days, and those listed are often the wrong vintage. Merchants and retailers tell of the lack of information from Treasury about these wines.