The winemaker behind Penfolds is selling three Australian wineries and closing a packaging business as it embarks on the latest chapter in its massive cost-cutting drive.
Treasury Wine Estates has hung out the for sale sign at its South Australian Ryecroft winery - which used to produce much of the group's famous Rosemount wines - along with the T'Gallant and Baileys wineries in Victoria.
A Treasury spokesman said T'Gallant, which focuses on pinot varieties, and Baileys, known for its dry reds and dessert wines, did not have sufficient scale for TWE's needs.
The decision to sell Ryecroft, in the McLaren Vale, comes just months after it was mothballed in November 2014.
Treasury will also wrap up its wine packaging and warehousing business at Karadoc, near Mildura in Victoria, and sell its Asti winery in California.
The moves are expected to be completed during fiscal 2016 and save Treasury about $50 million a year by 2020.
Chief executive Michael Clarke said money saved would help cover the cost of ramping up Treasury's marketing campaign that has been launched in an attempt to lift sales.
"By continuing to reduce costs, and optimising the scale and efficiency of our supply chain networks in major production areas, Treasury is well placed to pursue growth opportunities that exist for our wine brands in key markets around the world," he said.
Treasury launched a major cost-cutting campaign in May 2014 after knocking back a $3 billion takeover offer.
It axed jobs across its global business with the aim of saving $35 million in savings from this financial year.
Mr Clarke on Tuesday said a further $15 million in savings had now been identified and were expected to be realised in fiscal 2016.
Treasury expects a small number of job losses from the changes to its supply chain.
But the company could not say how many jobs may go because some operations would be transferred from one site to another, and the wineries and vineyards could be sold to new owners without the loss of any jobs.
The Australian Workers' Union said Treasury Wines was a major employer in the Sunraysia region of Victoria and the closure of the packaging and warehousing operations at Karadoc would have a serious flow-on effect through the local community.
Morningstar analyst Farina Parsons said it was good to see that Treasury management was delivering on its commitment to improve its supply chain, but the company still had more to do.
Treasury shares closed four cents lower at $5.12.
Share
