The history of stuff-ups, miscalculations and underachievement at Penfolds owner Treasury Wine Estates could fill a book. Its capacity to disappoint is legendary.
Now the company has bravely come up with a new master plan, hoping this one will hit the mark.
Treasury Wine has become the corporate equivalent of a widow maker for those who take up the challenge to lead the company. Over the past decade and a half, investors have watched as each new management regime’s plan to restructure, rescue and reshape the business has largely flat-lined.
So June 4, 2026 should be noted in the history books as yet another date for a new strategic vision for the high-profile but accident-prone global winemaker.
History and probability don’t favour the success of the latest plan to simplify Treasury Wine’s portfolio from 76 brands to 30 and potentially sell some or all of its US wineries.
But the sharemarket certainly bought it. After a 22 per cent fall in the company’s market value since the start of the year, Treasury Wine’s share price caught a break and spiked more than 13 per cent on Thursday after the rescue/resuscitation plan was made public by its latest chief executive, Sam Fischer.
Treasury Wine has become the corporate equivalent of a widow maker for those who take up the challenge to lead the company.
The strategic plan certainly contained all those fabulous management consultant buzz words – “reshaping”, “transformation”, “focus”, “sharper focus” and even the catchy “grape to glass”.
That’s a good start for a company that needs more than a renovation, but it’s the execution that will take it from a slide pack to enhanced return on investment, and ultimately dividends.
Fischer set to lay the groundwork for this overhaul soon after he started the job at the back end of last year, when he warned investors that things could get a bit ugly before they got better. He cleared the cupboards, wrote down assets by $650 million in the six months to December 2025 and scrapped dividends, creating a clean slate to start with a fresh overhaul.
But it’s easy to have sympathy for investors who are gun-shy of this company’s strategic overhauls.
The largest and longest problem Treasury Wine has struggled with is its troubled business in the United States. Instead of selling it, previous attempts to fix the problem have involved ploughing $2 billion into buying more US assets over the past five years.
Some of these wineries and brands will now land in the clearance bin, while others at the luxury end will receive a generous expenditure treatment.
Fischer’s underlying plan is to get rid of what the industry calls “commercial” brands, and which consumers would refer to as “plonk”, or the kind of wine that deserves to be hidden inside a paper bag as shoppers finish at the supermarket.
There has been a structural change in the way we like our wine – a shift towards spending up on finer drops and buying less of the cheaper stuff.
Fischer’s new strategy acknowledges such trends as shaping the future of global wine, including premiumisation, drinking less but better wine, preferring lighter styles and consuming in moderation, particularly among younger people.
However, last year’s unsuccessful attempts by his predecessor Tim Ford to address that shift by selling the company’s supermarket Wolf Blass, Lindeman’s, Yellowglen and Blossom Hill brands provided evidence that execution of this strategy could be difficult, and costly.
Ford was also the architect of a previous review of demerging the luxury brands from Treasury Wine’s cheaper brands – a plan that was later canned.
As far back as 2014, then-incoming CEO Michael Clarke spoke about possibly getting out of the US. It came after one of Treasury Wine’s more notorious US setbacks the previous year, where the company needed to pour millions of bottles of wine down the drain as a result of excess inventory.
The astounding announcement that excess inventory would cost the company $160 million in provisions and wipe $30 million off its earnings in the 2014 year led to claims of “channel stuffing” – a management trick where a company boosts its sales figures by pushing more product through its distribution channels than retailers or distributors can possibly sell.
In a 2013 column, I questioned how this excess could have been accumulated without anyone in management realising, and posited that the Kool-Aid at the company must have been laced with some of its stiffest product.
More recently, corporate governance issues have also haunted the business. Treasury Wine paid a $65 million fine, but made no admissions, following a class action that alleged it had engaged in misleading or deceptive conduct and breached continuous disclosure obligations in its profit guidance provided in 2018 and 2019.
I have only scratched the surface, as the winemaker is staggering from one misstep to the next. It really deserves a book.
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