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AUSTRALIA.. Andrew Carter, Chief Commercial Officer APAC & EMEA for Treasury Wine Estates (TWE), has decided to leave the company following major changes to the company’s business model.
Carter, a much-respected drinks and travel retail executive, left his position as Bacardi Global Travel Retail Director in early 2012 to join the wine giant. He was initially Managing Director of the Europe, Middle East & Africa, Regional Business Unit (EMEA RBU) and Global Travel Retail.
In August last year he was promoted to Chief of Staff, taking on additional leadership responsibilities for corporate strategy & business development, transformational projects and the running of the CEO office.
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Andrew Carter: Much respected in the drinks and travel retail sectors |
Announcing the changes, TWE said in order to better optimise its business model, and as part of an assessment of the best ways of managing its operations, it will now focus on its ‘Commercial’ brand portfolio in Australia separately to its Luxury & Masstige portfolio.
“This transformation will deliver greater focus on market and competitor dynamics and drive efficiency and profitability for both the company’s Commercial and Luxury & Masstige brands,” TWE said. “This change to TWE’s Australian brands complements action already underway in the Americas to reshape the company’s portfolio to provide additional focus on the Luxury & Masstige portfolio while improving the performance of TWE’s Commercial portfolio in the Americas.”
CEO Michael Clarke said: “The Commercial wine market is markedly different to that of Luxury & Masstige and we need to consider new operating models and ways of working to realise growth and improve profitability across both.”
The Australian & New Zealand (ANZ) business will now be jointly run by Angus McPherson, currently General Manager – Australia, who will lead the team focused on TWE’s Australian Commercial portfolio together with Simon Marton, currently Chief Marketing Officer. Marton will also lead the team focused on TWE’s Luxury & Masstige portfolio. Both rolesreport to Clarke.
In addition, TWE also intends to manage its Asia and Europe, Middle East & Africa (EMEA) regions separately to ANZ. As a result, TWE said, Carter has decided to leave the company.
In another important change, TWE said it is changing the release date of its flagship Penfolds wines to better manage allocations and availability
The company will move the release dates for new vintages of its Penfolds Bin Series and Penfolds Icon & Luxury Collection wines to one combined annual release, commencing 16 October 2014.
“Moving the release of Penfolds Bin Series and Icon & Luxury Collection wines to October each year will ensure Penfolds wines are available for sale over a much longer trading period and help TWE establish a more sustainable business model,” the company said. “An October release also means the company is better placed to manage allocations and inventory levels with key customers around the world throughout the year – in contrast to selling through the release in the final quarter of each fiscal year.”
Clarke commented: “Since starting on 31 March my team and I have moved quickly to initiate changes to deliver improved performance, support our brands, reduce costs and demonstrate that we are prepared to drive changes to unlock value and sustainably deliver results.
“The changes we are making to our business model, including moving Penfolds release dates, not only make commercial sense but are also good for our brands”.
IMPAIRMENT CHARGE
TWE has completed a detailed review of its long-term plans and will now recognise a non-cash brand and related-asset impairment of up to a$260 million (after tax, unaudited) in fiscal 2014. The impairment reflects the combination of historical prices paid for pre-demerger acquisitions and the decline in market growth rates for commercial wine globally; and relates to the company’s Commercial brands, IT, plant and equipment assets.
Clarke said: “Today’s announcement of an asset impairment further highlights the need for TWE to do things differently. The current business model is not being optimised and fails to reflect the company’s outstanding capability, brands and people.”
