Treasury Wine Estates (TWE) has lowered its 2026 fiscal year outlook, withdrawing earnings guidance for Penfolds and Treasury Americas due to softening demand in China Mainland and distribution challenges in the U.S., as announced on October 13, 2025. This recalibration highlights the evolving dynamics facing the global wine industry.
In China Mainland, Penfolds’ first-quarter shipments met expectations across key markets, buoyed by the successful August Collection Release. However, sales weakened in June and July as large-scale banqueting declined, reflecting shifting consumption patterns. August showed some improvement, but preliminary Mid-Autumn Festival data indicates depletions remain weak relative to plan, with September growth lagging targets. If this trend continues, TWE anticipates missing 2026 depletion goals, leading to the withdrawal of forecasts for low to mid-double-digit EBITS growth this year and 15% in 2027. To mitigate this, TWE is reallocating stock to other markets, a move that underscores the need to adapt to China Mainland’s changing wine culture since tariffs were lifted in 2024.
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Together, these two markets—once twin pillars of TWE’s growth—now present contrasting challenges, underscoring the complexity of managing a global premium wine portfolio. In the U.S., the story shifts to operational hurdles. Treasury Americas has been hit by a distributor transition in California, its largest market, following Republic National Distribution Company’s (RNDC) exit on September 2. The switch to Breakthru Beverage Group has cut an estimated A$50 million from net sales, with A$100 million in RNDC-held inventory—including a 0.2 million case excess disclosed in August—still under negotiation as of October 10. This disruption led TWE to retract its modest EBITS growth projection. Outside California, brands like DAOU, Frank Family Vineyards, and Stags’ Leap have driven over 5% depletion growth, offering a bright spot. The leadership transition adds another layer of uncertainty, with incoming CEO Sam Fischer set to take charge on October 27.
In response, TWE has paused its A$200 million share buyback—having repurchased A$30.5 million—while maintaining a strong A$1 billion liquidity buffer. The company remains committed to Penfolds’ long-term equity through pricing discipline. The annual general meeting on October 16 at 10:00 AM AEDT will likely address these strategies. For the wine trade, TWE’s adjustments signal a post-boom, post-tariff reality. Retailers may rethink inventory, while the industry watches how TWE, under Fischer’s leadership, adapts. This recalibration may well serve as a bellwether for how global wine producers navigate this shifting landscape.
