The chief executive of Penfolds owner Treasury Wine Estates has said that more than a quarter of the firm's wine brands could be 'retired' or put into joint-ventures with other companies.
Of Treasury Wine Estates‘ 80 wine brands, 25 are ‘non-priority, commercial brands’, Michael Clarke (pictured) told shareholders at the firm’s annual general meeting this week.
Australia-based Treasury is looking to address those brands ‘either by retiring them or by doing a deal with a third party, and therefore owning those in a joint-venture structure’, Clarke said. He did not name specific brands.
The Wolf Blass and Rosemount owner has entered what Clarke termed a ‘reset year’ as it seeks to improve sales and recover from a net loss of A$100.9m in its last financial year.
Clarke said Treasury is focusing marketing dollars on 15 wine labels that he believes could become global brands. Penfolds is one of those, but so is Californian Pinot Noir label Etude, according to Clarke.
He said Treasury would launch a New Zealand Pinot Noir under the Etude label in Australia in 2015. ‘Etude is not linked to a particular vineyard or an appellation. Rather, its provenance is varietal based,’ he said.
‘Around 15 have the potential to be scalable and flexible; what we call global umbrella brands,’ Clarke told shareholders. Behind those are 20 ‘international brands’ and another 20 local brands.
He also reaffirmed Treasury’s commitment to the US wine market, despite its financial problems there, and also China, where he said the firm has restructured its distribution.
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Written by Chris Mercer