Treasury Wine Estates hit by major US write-down
Australia’s largest wine producer has slashed the value of its US business amid weakening demand. The move deepens investor concerns after a year of heavy share price losses.
Treasury Wine Estates, Australia’s biggest producer, has been forced to write down the value of its business in the United States by some US$450 million due to the continuing malaise in demand, especially for commodity wines.
In a statement to the Australian stock market it said today that it will write down the goodwill value of its US assets worth some A$687m in its interim results in February and adopt more “conservative” estimates of growth.
It also warned investors that hit to the balance sheet value of the US arm could be larger.
Shares slump to decade low
The news hit the shares hard. They had already halved in value this year and now stand at AU$6, a 10-year low.
In October Treasury scrapped its fiscal 2026 earnings guidance, citing an “uncertain outlook” for Penfolds and its Treasury Americas business.
Company says impairment is accounting-based
A Treasury spokesman said the write-down “is in response to further moderation in the US wine category trends and reduced long-term earnings growth rate assumptions in this market.
“This impairment is an accounting adjustment required under standards — it does not represent an operating loss and does not impact our cash position.”
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Americas cash flows now at critical point
In its 2025 annual report Treasury told shareholders that “a reduction in future cash flows in the Americas business of 11% per annum over the forecast period would reduce impairment headroom to nil.
Today’s announcement confirming further slow demand has reduced that scope to zero.
Premium brands still growing but market outlook weakens
The statement said “While a number of TWE’s larger brands continue to grow ahead of market – including Daou, Frank Family Vineyards and Matua – in response to further moderation in US wine category trends, TWE has applied more conservative long-term market growth assumptions, resulting in reduced long-term earnings growth rates, which will impact carrying values within the Treasury Americas and Treasury Collective – Americas cash generating units.”
New CEO faces immediate pressure
The further US downturn presents an immediate headache to Sam Fischer, who only joined TWE as chief executive from Lion Group at the start of October.
He has already visited the operation in China and will visit the US before briefing investors and analysts on his “initial observations” later this month.
They will want more detailed information on just how far the US market continues to disappoint, especially as TWE took the strategic decision following the China embargo to invest heavily in the US to reshape it business and reduce the reliance on China, which at one stage accounted for a third of its sales.
Concerns over acquisition prices resurface
Treasury bought Frank Family Vineyards for US$315 million in 2021 and paid US$900 million for Daou to boost its offerings at the premium end of the US market.
At the time of both deals analysts suggested that it may have overpaid for both companies in its haste to reshape the business and put less reliance on China and its domestic Australian market.
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