Treasury facing legal action over dumping stock

Global wine giant Treasury Wine Estates is facing legal action from Australian shareholders after it was forced to write off six million bottles of wine in July due to oversupply.

Treasury Wine EstatesAccording to AFP, law firm Maurice Blackburn and class action funder IMF Australia are preparing a shareholder lawsuit against Treasury Wine Estates, which owns Penfolds and Wolf Blass among other wine brands.

This July, the company announced an AU$160m loss in the US market and the destruction of AU$35m worth of “old and aged commercial stock” in America due to oversupply issues.

As a result, in August the company reported a 53% profit slump in its full-year results, with profits down from AU$89.9m in 2012 to AU$42.3m, leading in part to the stepping down of Treasury’s CEO, David Dearie in September.

AFP reports that the class-action lawsuit, which has yet to be formally filed, will allege that TWE failed to adequately inform shareholders of the overstocking of its US distributors and the potential financial impact of its actions, which led shareholders to lose millions of dollars.

“By not disclosing the possibility of a material write-down when we allege it should have, the company caused shareholders to suffer financial loss,” IMF investment manager, Simon Dluzniak, told AFP.

According to Maurice Blackburn principal Ben Slade, Treasury “knew or should have known” that large financial losses were inevitable as early as August 2012 – a year before it disclosed the write-downs, but chose to “project earnings growth when it must have been able to work out that massive write-downs were on the horizon,” Slade said.

In a statement to the Australian stock exchange, Treasury said: “TWE strongly denies any allegations of wrongdoing and will defend any class action proceedings vigorously.”

Leave a Reply

Your email address will not be published. Required fields are marked *

Please note that comments are subject to our posting guidelines in accordance with the Defamation Act 2013. Posts containing swear words, discrimination, offensive language and libellous or defamatory comments will not be approved.

Subscribe to our newsletters

Regional Account Manager

Scotland, UK

Retail Assistant Manager

The Whisky Exchange

Retail Supervisor

The Whisky Exchange

Retail Sales Advisor

The Whisky Exchange

Retail Manager

Friarwood Fine Wines
SW London, UK

Assistant Manager

Seven Cellars
Brighton, UK

Key Account Manager

MMI Dubai
Dubai, UAE

Head of Supply Chain

Lanson International UK Ltd
London W1, UK

National Account Executive

Home Based working in Central Belt. Glasgow/Edinburgh, UK

Prowein 2018

18th Mar 2018

The City Wine Show

London,United Kingdom
13th Apr 2018

Prosecco Springs

London,United Kingdom
26th Apr 2018
Click to view more

The Global Malbec Masters 2017

the drinks business is proud to announce the inaugural Global Malbec Masters 2017

The Global Sparkling Masters 2017

the drinks business is thrilled to announce the launch of The Global Sparkling Masters.

Click to view more