Treasury Wine Estates has taken the highly decorated Wolf Blass brand and others off the market for now, saying the offers received were too low.
“Following the completion of its process to explore divestment of the Commercial portfolio, TWE has concluded that the offers received for these brands did not represent compelling value and therefore their retention is the best course of action,” TWE said in a statement.
In August last year TWE announced that it was selling Wolf Blass along with other commercial brands Lindeman’s, Yellowglen and Blossom Hill.
“Consumers everywhere around the world are drinking less wine and drinking higher priced wine… and I think low-end, low-price commercial wines will continue to decline for years ahead,” Mr Ford told The Australian.
He was speaking after TWE reported a 19.6 percent increase in half-year revenue to $1.57 billion, as net profit rose 32.5 percent to $220.9 million.
“The majority of our earnings and nearly all of the growth comes from the luxury portfolios and that will just continue over the next years,” Mr Ford said.
“That’s our strategy, a luxury-led growth strategy, through Penfolds and Treasury Americas – that is the real heart of this business now.
“You have to go where the consumers are going.”
Taylors said in October last year that it was looking at the TWE commercial brands.
“We’ve got to do some due diligence on these things,” Taylors Wines managing director Mitchell Taylor ssaid at the time.
“We’re certainly having a good look at them.”
Profits from TWE’s low-cost brands halved in the six months to December 31 compared with the same period 12 months earlier, the Financial Review notes.
Treasury wrote more than $200 million off the value of those brands last year.
Penfolds continues drive profits for the company.
Penfolds delivers an outstanding result,” TWE said, “with strong growth in Bin and Icon portfolio shipments to Asia reflecting the re-establishment of the Australian COO portfolio in China and continued momentum in other Asian markets.
Demand for Penfolds is currently outstripping supply.
TWE is progressing preparations for the transition to a Global Premium division from the commencement of F26.
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