Treasury Wines deepens US push with $433.5m Napa Valley acquisition

Australia’s biggest winemaker Treasury Wines has splashed out $433.5 million to acquire a luxury wine business in California’s Napa Valley in the latest sign of its deepening push into the lucrative American market.

Treasury, which owns the Penfold’s label in Australia, has had over the past year had significant success at the cheaper end of the US market. It will now look to move upmarket by acquiring the Frank Family Vineyards portfolio, which includes chardonnay, cabernet sauvignon, pinot noir, and sparkling wine offerings. Founded in 1992, the Californian vineyard’s luxury wines retail from $US38 ($52) to $US225 a bottle.

The ASX-listed company said the purchase would fill a key gap in its fast-expanding Treasury Americas portfolio.Credit:Tamara Dean

The ASX-listed company said the wine business, which includes two vineyards, a winery, and a tasting room, would fill a key gap in its fast-expanding Treasury Americas portfolio, which has also benefited from a partnership with Snoop Dogg.

The $11 billion giant was forced to pivot into other markets, and has done so successfully, after Beijing slapped 200 per cent tariffs on Australian wine earlier this year.

Treasury Wines chief executive Tim Ford said the acquisition, to be completed in December, was an important step to becoming a leader in premium wines in the American region.

“This is a rare opportunity to acquire a luxury brand and portfolio of wines that consumers enjoy and connect with,” Mr Ford said.

“This is a compelling strategic and financial investment, comfortably meeting our investment criteria and one we expect will deliver attractive growth and financial returns for TWE’s shareholders over the long-term.”

Treasury Wines has been one of the many companies hit by the supply chain crisis unfolding around the world.

The $11 billion giant returned to profit in the 2021 financial year despite an $80 million drop in earnings from the once-lucrative China market.

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