Treasury Wine Estates highlights A$687.4M write down of US assets

Treasury Wine Estates (TWE) has announced it would write down the value of its US business by A$687.4 million. The company’s revision of its long-term growth comes amid a global trend of shifting drinking patterns, driven by younger generations who seek healthier alternatives to alcohol.

The Australian global winemaking and distribution business saw a significant drop in shares following the announcement earlier this week, with sales forecast to decline as the long-term growth outlook for wine weakens.

“In its 2025 Annual Report, TWE disclosed that a reduction in future cash flows in the Americas business of 11% per annum over the forecast period would reduce impairment headroom to nil,” a company statement says.

“While a number of TWE’s larger brands continue to grow ahead of market — including DAOU, Frank Family Vineyards and Matua — in response to further moderation in US wine category trends, TWE has applied more conservative long-term market growth assumptions, resulting in reduced long-term earnings growth rates, which will impact carrying values within the Treasury Americas and Treasury Collective — Americas cash generating units.” 

DAOU is a luxury winery founded in 2007, Frank Family Vineyards was purchased by Treasury Wine Estates in 2021, and Matua was founded in 1974.

Value of US business reduced

TWE also expects “the impairment will result in at least all goodwill (US$687.4 million June 30, 2025) currently carried in the Americas being written off, with potential to impact other assets.”

However, the company adds that the final impairment amount and asset allocation will be finalized as part of the 2026 interim results. 

TWE CEO Sam Fischer, who took over the role in October, will host an investor and analyst conference call, where further announcements are expected about TWE’s key markets, including in China and the US. 

The recalibration of financial expectations from one of the world’s largest wine producers led to TWE’s share price falling by 6.4% to A$5.45, its lowest since 2015.

Shift in consumer trends

Alcohol consumption (including wine and spirits) is trending downwards in the US as more people are opting out, according to Innova Market Insights.

Younger Millennials and Gen-Z are leading this trend. At the same time, an increasing number of Gen X and Boomers are also motivated by having a healthier lifestyle and have changed their relationship with alcohol.

In turn, this has prompted an increase in the innovation of alternative, no-alcohol, and low-alcohol beverages.