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Squeeze on cheap wine prompts cost cuts at Treasury
Simon EvansSenior reporter
Key Points
- The Penfolds division is the flagship of Treasury Wine Estates, which also runs a mid-market unit known as Treasury Premium Brands, and a third unit known as Treasury Americas.
- A review is underway to prune costs and mainly centres on Treasury Premium Brands, with wines including Wolf Blass, Squealing Pig, Lindemans, Pepperjack and Wynns.
- CEO Tim Ford says changing consumer preferences and economic uncertainty mean work is stepping up in that review.
- Analysts say a potential unwinding of China’s punishing wine tariffs would be a catalyst for a rise in the share price.
Treasury Wine Estates is stepping up a cost-cutting and restructuring push centred mainly on its division selling commercial wines under $10 per bottle as it braces for tougher economic times and repositions further towards the luxury segment.
The company, which has a workforce of about 2500 people, last week foreshadowed the looming restructure in internal communications and a series of meetings.
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