Treasury Coup: Was It Something I Said?

MELBOURNE, Australia – It’s a strange feeling to learn that someone you’ve only just met has been ousted from his high-profile corporate job. My first thought on hearing that David Dearie was dethroned on Monday as CEO of Treasury Wine Estates was, “Well no wonder, he’s been consorting with the wrong types of people.”

I met Dearie just last Friday, as Treasury hosted a gaggle of writers, importers, retailers from around the world and China at Saltram winery, an historic property in the Barossa. Treasury was a major sponsor of Savour 2013, the international conference held last week in Adelaide, where I spoke on a panel about social media and its relevance to the wine industry. As a major conference sponsor, Treasury was entitled to a day of our attention. (Rival co-sponsor Pernod Ricard had us on Thursday at its Jacob’s Creek winery.)

Treasury is huge. It’s brands include the Australian labels Lindeman’s, Wolf Blass, Wynn’s Coonawarra Estate, Rosemount Estate, and Seppelt, as well as a few less familiar names such as Coldstream Hills and Heemskerk. And of course, there’s the granddaddy of them all, Penfold’s. In the US, it owns Beringer.

Treasury’s also in trouble. It recently took at $160 million loss by deciding to destroy thousands of gallons of cheap wine it couldn’t sell in the U.S. market. (Where’s Jeff Siegel when you need him?) That loss, and the market misjudgment it signifies, apparently played a huge role in Dearie’s demise.

That fleeting proximity gives me no great insight into the deliberations in Treasury’s board room, of course. But a conversation I had with Wayne Falkenberg, the chief winemaker for Lindeman’s, illustrates the dilemma Treasury and Australia in general face in the U.S. market.

“How can we get Lindeman’s wines above the $5 level?” Falkenberg asked. To recapture the attention of U.S. consumers, Australia’s winemakers have to counter the market perception that Australian wine is either cheap and uninteresting except for a cute critter on the label, or a high-octane fruit bomb. There’s plenty of fine, exciting wine in between, as I discovered in 10 days here, but much of it is not available in the U.S. Winemaker after winemaker shrugged and said he or she had been in the U.S. market but their importers went belly up in the market crash.

Being no marketing genius, I did not have a satisfying answer for Falkenberg. Create a new line at $5 and raise the price on the existing wines? Just bump it up a bit each year until the market objects?

When I tasted the Lindeman’s Bin 65 Chardonnay 2012, I was impressed with its expressive fruit and impeccable balance. At $5-6 per bottle, it’s ideal for parties or casual dinners. And yes, it would be quite competitive at twice the price. As it is, it beats any of the critter wines I’ve tried and a good many domestic chardonnays under $10 as well. It’s a fine example of good value Aussie wine.

Not what the winemakers want to hear, perhaps, but good news for the U.S. consumer.

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About Dave McIntyre

Wine columnist for The Washington Post, co-founder of DrinkLocalWine.com, and blogger at Dave McIntyre's WineLine (dmwineline.com).
This entry was posted in Australia, Current Affairs, Rants, Wine and tagged , , . Bookmark the permalink.

5 Responses to Treasury Coup: Was It Something I Said?

  1. Don’t worry, Dave. I’ll have a few thoughts on the blog about this subject on Sept. 26.

  2. oira79 says:

    Didn’t you report earlier that one of the main points of this conference was to ignore bloggers?

    Bwahahahaha.

  3. Pingback: Terroirist: A Daily Wine Blog » Daily Wine News: More Than Cab

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