Treasury Wine Estates (TWE) is to sell three of its wineries in Australia and close down another in California as part of continued plans to cut overheads.

The Penfolds and Wolf Blass producer announced a raft of changes to its US and Australian operations, designed to optimise its supply chain and help it to separate production of its ‘luxury and masstige’ wines from lower-priced commercial bottlings.

Under the plans announced this week, TWE is to sell off its recently closed Ryecroft winery in McLaren Vale, as well as the T’Gallant facility in Mornington Peninsula and the Bailey’s winery in Glenrowan.

The company is also to transfer current packaging and warehousing operations at Karadoc, near Mildura in Victoria, to the core Wolf Blass facility in Barossa.

Meanwhile, commercial wines currently processed at TWE’s Great Western and Wynn’s Coonawarra bases will be transferred to Karadoc, making it exclusively focused on the production of TWE’s Australian commercial wine products.

At the same time, ‘Masstige’ wine processing undertaken at Great Western and Wynn’s will move to Wolf Blass, leaving the two facilities to focus on luxury wine processing and warehousing.

In California, TWE will close its Asti winery in Sonoma County, transferring its production to other wineries, mostly in Paso Robles and at Beringer’s Napa Valley facility.

Also in Napa, the company is consolidating packaging lines at its Napa Bottling Centre (NBC) to increase efficiency.

TWE did not reveal details of the financial implications of the announcements, or their impact on jobs.

The news comes after the company announced a 60% slump in net profits to A$42.6m in the six months to 31 December, with chief executive Michael Clarke saying that TWE was in the midst of a ‘re-set year’.

Written by Richard Woodard