Who is stuffing up the South American wine exports to America ?
Why are the South American Wine markets suffering currently with their exports to the US. Well it is not difficulty to find out. Millions of dollars worth of Australian wine deemed unfit to drink by fussy Americans is to be dumped in America’s less discerning markets.
Australia’s largest wine company, Treasury Wine Estates, says it’s taking the move because it over-estimated the US market demand and the wine is not suitable for ageing. “TWE’s leadership team in the Americas believes old and obsolete product is limiting the company’s growth ambitions,” chief executive David Dearie says. “As such, decisive action must be taken to address these barriers to growth and I am confident that the steps we are taking support our long term growth agenda.” The clear out will ensure “only the freshest and highest-quality Treasury Wine Estates wines are available and enjoyed by brand conscious US customers,” he says.
TWE, which won’t identify the labels, says the wine to be destroyed is worth $A35 million and is part of a $A165 million write-off that has caused the share price to drop sharply. Another $A40 million will be lost in selling off other stock at heavy discounts. TWE has more than 80 brands, including Penfolds, Wolf Blass and Rosemount in Australia and Matua Valley and Shingle Peak in New Zealand.
It also owns the Berringer Estate in the US but this brand is not affected. The share price fell 71Ac to $A5.11 in reaction to the move, which slashed the company’s market value by $A460 million and was the biggest decline since it split from former parent Foster’s in May 2011. In addition, the reduction in its shipments to the US will also left the company carrying excess bulk and finished wine and some onerous grape contracts, which millions were lost as Americans continued to shun Aussie cheap plonk