Treasury Wine Estates has offloaded the US licences for four of its lower-priced wine brands to The Wine Group as part of the group’s ongoing strategy to move away from the value end of the category.
The “long-term” agreement, announced yesterday, will give the California-based company the rights to source and sell TWE’s Coastal Estates and Meridian brands, as well as Beringer’s Main & Vine and Founders’ Estate offerings, in the Americas. As part of the arrangement, The Wine Group will inherit the inventories for the brands while also taking on the responsibility for their bulk supply contracts going forward.
TWE has valued the transaction at around AUD100m (US$76.9m).
“This transaction is a significant milestone towards our plans to deliver the future state premium US wine business,” said CEO Tim Ford. “We can now focus solely on continuing the growth of our premium brand portfolio to drive future performance in the Americas.”
Cate Hardy, who heads up The Wine Group, added: “These brands complement TWG’s leadership in the value segment, alongside our growing portfolio of premium wines, introducing more consumers to our high-quality wines at every price point.”
Speaking to just-drinks last month, Ford described TWE’s presence at the value end as a “drag on our business” in the US. “We’re still in-line with our commitment to have the shape of the US business right by the end of calendar-2021,” Ford said.
Also in the exclusive interview, Ford confirmed the divestment of “surplus vineyard assets” in the US during the group’s fiscal first-half, to the end of December last year.