By James Atkinson

Treasury Wine Estates (TWE) is well positioned to satisfy the growing consumer demand for luxury and masstige wines in existing and new markets, according to boss David Dearie.

Announcing its first half results, Dearie said Treasury's long-term commitment to premium wine had recently made strong progress in several areas.

These included the acquisition of 591 hectares of premium vineyards in South Australia and the Napa Valley, the acquisition of the remaining 50 per cent of what is now the Matua Marlborough winery and a 50 per cent increase in the company's non-current USA inventory.

"The global wine industry outlook remains positive as consumers continue to seek out more premium wine, and TWE will continue to invest for future growth by ensuring that we have the brands and quality wines to meet this increasing demand," he said.

Dearie said Treasury's first half EBITS of $73.4 million was in line with guidance provided at its AGM last year.

This result was impacted by a significant increase in cost of goods sold (COGS) of $2.24 per case, principally driven by the weather affected 2011 vintage, and a challenging retail landscape.

The Australia and New Zealand EBITS result of $36 million was impacted by a tough retail environment in the first quarter, a COGS per case increase of 7.7 percent and significantly less volume of premium wine with Wynns of Coonawarra down 28 per cent and Pepperjack down 16 per cent. 

"However despite these headwinds TWE grew market share in the second quarter of fiscal 2013 with volume and value sales growth outperforming the market at 2.1 percent and 3.4 percent, respectively," Dearie said.

"By concentrating on price leadership, superb consumer facing activities and the reallocation of an increased supply of luxury and masstige wines, we remain committed to the overall guidance of mid-single digit constant currency EBITS growth in fiscal 2013."

The Shout Team

The leading online news service for Australia's beer, wine, spirits and hospitality industries.

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