Australian wine giant posts $1.08 billion loss as entire industry bleeds profits
The parent company behind iconic wine brand Penfolds has recorded a mammoth annual loss, just weeks after it was revealed the Australian industry had copped a devastating blow to production and profits.
Treasury Wine Estates recorded a $1.08 billion loss for the year ending June 30, which it blamed largely on sluggish performance and writedowns in the US.
The parent company behind wine label Penfolds recorded a nearly $1.1 billion loss. Supplied
The company admitted it expects zero growth for the rest of 2026.
Treasury’s full-year revenue tumbled 12.2 per cent to $2.63 billion, including a 15 per cent drop in profits for its flagship Penfolds business.
Penfolds wine sales recorded a 7 per cent drop over the same period, even though demand increased in key Asian markets, including China.
Despite the slump, Treasury Wine Estate’s chief executive Sam Fischer said the company still pinned its hopes on the famous wine label’s ongoing performance.
“F26 was a year of decisive action and significant change for Treasury Wine Estates,” Fischer said.
“While our financial performance reflected evolving market conditions and the proactive measures to ensure brand and channel health, we made substantial progress towards reshaping the business for long-term success.
Treasury Wine Estate’s chief executive Sam Fischer said the company still pinned its hopes on the famous wine label’s ongoing performance. Louise Kennerley
“Penfolds, once again, proved it is a global luxury wine brand that transcends the wine category.”
Fischer said he expected 2027 results would be “at least equivalent” to the previous period.
The bleak 2026 results are a stark contrast to the previous financial period, when the wine giant recorded a $437 million profit.
Treasury confirmed that it would not pay a final dividend on Thursday, after shares fell 2.4 per cent to $5.37 following a brief post-result spike.
Australia’s famous wine industry is in the grips of a crisis.
Winemakers are bowing out of the business, vineyards are closing and major retailers are leaving wine production in the dust.
Wine exports also plunged by 7 per cent in the year ending June 30 to $2.3 billion, representing 41 million fewer litres of wine, according to Wine Australia’s Export Report.
Penfolds recorded a seven per cent slump in sales. Dan Murphy's
The total export volume dipped below 600 million litres for the first time since 2004.
Meanwhile, Endeavour Group, the owner of Dan Murphy’s and BWS, announced in May that it would move away from vineyards and wineries in SA, Victoria and Tasmania.
Award-winning wine label Heartland Wines in South Australia collapsed this month, dealing another blow to the country’s floundering industry.
Famed winemaker Darren De Bortoli also decided to uproot shiraz vines in the Riverina and Rutherglen regions in NSW and told A Current Affair it was due to a “nasty” downturn in wine sales.
“We just can’t continue to grow grapes and make wine and have the market prices way below the cost of production,” he said.
Australia is still the world’s fifth-largest wine producer and exporter, however tastes are changing.
The younger health-conscious generation of drinkers have contributed to a red wine decline of 29 per cent year-on-year.
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