Post-China, TWE Has Another Crack at the US

Life after China continues for wine maker and exporter, Treasury Wine Estates which is continuing to push deeper in the huge US market (even though it has had a few disappointments there in the past decade or more).

Necessity is the driver of the push as Treasury (TWE) still feels the impact of the punishing Chinese tariffs on its wine exports that have shut the company out of what was its fastest growing and most lucrative market.

TWE announced yesterday that it had struck a deal with America’s second-largest drinks distributor to expand the reach of its brands throughout the US.

Treasury has signed an agreement with Republic National Distributing Company (RNDC) to distribute its wine labels into California, Texas, Louisiana, Oklahoma, Kentucky, Mississippi, Utah, Wyoming, and Nebraska.

RNDC already distributes Treasury’s portfolio in Michigan, Georgia and New Mexico.

Rather than one huge fairly homogenous market, the US liquor market is very regional – wine is not drunk in volume in many states – beer and dark spirits such bourbons are – and there are restrictions in the distribution and retail sectors that hark back to the days of prohibition and gangsterism (1920’s and 1930’s).

in Tuesday’s statement Ben Dollard, Treasury’s Amercias president, said the company was in a “position of growth” in the US market and would fast-track that growth with the RNDC partnership.

“With our divestiture of commercial wine brands, we decided to re- evaluate our business needs to position our company for future growth,” he said.

“Our decision to partner with RNDC presents us a terrific opportunity to cultivate our trade partnership, to fast-track growth, execute our plans, and build long-term value.”

Investors liked the news and Treasury shares ended more than 3% higher at $10.27.

Glenn Dyer

About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

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