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Your email address will not be published.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

Sales Support Executive

Davy's
London, UK

Partner Manager – On-trade - Greater London

Maverick Drinks
London/M25 belt, UK

Partner Manager – On-trade - North West

Maverick Drinks
Manchester, UK

Partner Manager – On-trade - West & Wales

Maverick Drinks
Bristol, UK

Partner Manager – On-trade - South East

Maverick Drinks
Brighton, UK

Events Sales Executive

The Drinks Business
Central London, UK

Sale & Operations Manager

Marussia Beverages
Marylebone, London, UK

Prestige Account Manager – Europe

Jackson Family Wines
London, UK

Pink Rosé Festival

Cannes,France
7th Feb 2018

VinoVision Paris

Paris,France
12th Feb 2018

Vinisud

Montpellier,France
18th Feb 2018
Click to view more

Champagne Masters 2017

The only Champagne blind tasting in the UK, the competition will reward the best wines in the following categories:

The Global Rosé Masters 2017

With wines from the palest of pink to almost ruby red, bone dry to almost cloyingly sweet, reductively handled to barrel-aged, as well as gently spritzy to fully sparkling.

Click to view more