Treasury Wine Takes AU$687M Write-down on US Business

Does this write-down expose Treasury Wine's catastrophic acquisition strategy, or reflect the company's prudent forecasting?

Published 2 days ago

Treasury Wine Takes AU$687M Write-down on US Business

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Above: A photo illustration of the Treasury Wine Estates company logo displayed on a smartphone. Image credit: Piotr Swat/SOPA Images/LightRocket/Getty Images

The Spin

Narrative A

Treasury Wine's write-down exposes its catastrophic failure of an acquisition strategy. The company has burned through billions of dollars on deals like DAOU and Frank Family Vinelands, which have failed to deliver growth. This has weakened Treasury Wine's balance sheet and left the company trading at book value, which will inevitably damage shareholder dividends.

Market Screener

Narrative B

Treasury Wine's impairment is a prudent decision in response to broader trends in the U.S. wine market, not an admission of operational failure. While key brands are continuing to grow ahead of the market, impairment was necessary to protect the company from declining U.S. consumption rates, which would have otherwise damaged its value.

Treasury Wine Estates