As a component of its ongoing effort to prioritise its high-end wines and to trim overheads, Australian multinational drinks company Treasury Wine Estates has sold 535 acres of wine-producing land, as well as its brand Souverain, to Californian rival E & J Gallo Winery, the biggest exporter of Napa Valley wines, thedrinksbusiness.com reports.
The vineyard in question, located in the Alexander Valley, will still supply many grapes for Treasury Wine Estates, which will henceforth be purchased from E.& J. Gallo.
Treasury Wine Estates, which produces massive global wine brands such as Wolf Blass, commented that it is focusing its attention on its premium wines – an initiative which could entail the sale or discontinuation of a number of its more ordinary-level wine brands.
Announcing the sale, the company stated, “As a result of this transaction, TWE will recognise a loss on disposal of this asset group of approximately US$7.5M (pre-tax) which will be reflected in the financial results for the year ending 30 June 2015.
“As communicated to the market on 31 March 2015, TWE is executing plans to optimise its supply chain and accelerate a separate focus on the Company’s Luxury & Masstige versus Commercial wine portfolios, globally. This includes simplifying its supply chain network and removal of excess capacity, both in the USA and Australia.”
© 2015 European Supermarket Magazine – your source for the latest retail news. Article by Peter Donnelly.