NEWS
TWE TO REDUCE SHIPMENTS AND CUT COSTS AMID STRONG HEADWINDS IN USA & CHINA
By Tony Zhu
18-12-2025
Source: TWE
Australia’s Treasury Wine Estates (TWE) said it will focus on reducing shipments to its two major markets, namely USA and China, to protect brand strength as inventories and pricing pressure build up amid growing market weakness.
In an investor conference call held yesterday, TWE’s newly appointed CEO Sam Fischer said the company is currently experiencing substantial headwinds in the USA and China, leading to very high inventory levels in both markets.
The company also said that it would look to cut annual costs of up to AUD100 million (USD67m) by fiscal 2028 or 2029.
It is also abandoning its share repurchase programme, at the same time it is flagging a review of dividends, potential sales of non-core assets, and reconsideration of planned capital investment.
“The weakness will impact our business performance in the near-term. Maintaining the strength of our brands and the health of their respective sales channels is of critical importance to our management team and our Board as we navigate through the current environment,” Fischer told investors.
In China, the company said it will reduce inventory by approximately 400,000 cases over a two-year period starting in the second quarter of next year in response to softer demand and parallel imports.
The move follows an earlier warning from the company that China’s ongoing crackdown on alcohol consumption at government and business banquets has weighed on sales depletions.
While Penfolds continues to deliver in mid-tier labels such as Bin 389 and Bin 407, inventories of its ultra-luxury wines are building up in China. At the same time, parallel imports are continuing to add pressure to pricing.
In USA, TWE said distributor inventory holdings outside California are above optimal levels by around 300,000, equivalent to AUD125 million (USD83m) in net sales revenue. The company plans to reduce those inventories over a two-year period.
The company’s shares had been suspended as requested by the company ahead of the update, share price slumped by a further 17 percent to an 11-year low of AUD4.57 when trading resumed, before recovering slightly to just below AUD5.
Seven years ago, they were priced at more than AUD18.
(the writer can be contacted at: info@thewinechronicle.com)
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