Luxury focus for Treasury Wine after Karadoc closure

Treasury Wine Estates will continue its push into the luxury wine market, as consumers shift to more “premium and luxury offerings”.

Treasury Wine Estates will continue to invest in its luxury wine brands as demand for premium products continues to grow. Picture: Supplied

Wine heavyweight Treasury Wine Estates will continue its push into the luxury wine market, months after announcing the closure of its Karadoc winery due to a slump in commercial sales.

At TWE’s annual general meeting on Monday, outgoing chairman Paul Rayner told shareholders consumers were continuing to “shift … towards more premium and luxury offerings” and away from commercial brands.

In July, TWE announced the closure of the company’s Karadoc site in northwest Victoria. The winery produced commercial brands Lindeman’s, Wolf Blass, Yellowglen and 19 Crimes. Sixty staff were affected by the closure.

TWE had now completed the “major rationalisation” of its commercial operations, but “this is a matter we keep in continual review”, Mr Rayner said.

Treasury Wine Estates outgoing chairman Paul Rayner. Picture: Luis Ascui

As TWE continued its focus on luxury wines, it would continue “expanding our vineyards in that area and cutting back in the commercial area,” Mr Rayner said.

TWE’s commercial offerings are produced by its Barossa winery in South Australia, and by winemaking partners Zilzie Wines and Qualia.

Treasury Wine Estates reported a $376 million profit in the 2023 financial year and total revenue of $2.4 billion, down from $2.5 billion in 2022.

The company was hit by a major blow in 2020, when China announced a trade freeze on Australian wine, knocking 35 per cent off TWE’s profits overnight.

Mr Rayner said he “welcome(d) the strengthening of diplomatic, economic and cultural ties between our two countries over the past year”.

“We have a clear plan in place should the Chinese market reopen to our Australian-made portfolio,” he said.

This year, TWE announced the successful production of its first Chinese-made wine under the Penfolds brand.

It also purchased Beenak Vineyard in Victoria’s Yarra Valley, which features plantings of cooler-climate varietals including Chardonnay and pinot noir.