Treasury faces hefty write-down

Treasury Wine Estates, Australia’s largest wine producer, is taking a major financial hit after confirming it will slash the value of its US business by roughly US$450 million. The company will reduce the goodwill value of its American assets and adopt more cautious growth projections following continued weakness in demand, particularly for lower-priced wines.

Shares have tumbled to AU$6, their lowest in a decade, after a difficult year during which earnings guidance was scrapped amid uncertainty for Penfolds and Treasury Americas.

While premium brands such as Daou and Frank Family Vineyards continue to outperform, the market’s overall slowdown is adding pressure on new CEO Sam Fischer and reviving concerns over high acquisition costs in recent years.