Company Throwing Away $35 Million of Wine
- 11 years ago
A company based in Australia, Treasury Wine Estates is going to be pouring approximately $35 million worth of wine down the drain. The business is also working with its American distributors to heavily discount many bottles of lower end wine.
Fine wines are known to get better with age. Well, what happens to the lower end wines?
A company based in Australia, Treasury Wine Estates is going to be pouring approximately $35 million worth of wine in the United States down the drain. The business is also working with its American distributors to highly discount many bottles of lower end wine that are getting close to the expiration dates.
That move is expected to cost the company an additional $40 million. The chief executive of Treasury Wine Estates describes the tough decision stating “The intent is to rebase the US inventory levels...a one off rebasing of inventory levels in the US... taking that excess inventory out of the system and we don’t see it as an ongoing process.”
The drastic overstock was blamed on over-estimating the sales of new product launches in addition to better storage capabilities in the US that reduced the need for large stock supplies.
As a general rule luxury wines often get better during the aging process whereas those that are on the cheaper end of the spectrum are meant to be consumed not long after bottling, otherwise the contents deteriorate.
Fine wines are known to get better with age. Well, what happens to the lower end wines?
A company based in Australia, Treasury Wine Estates is going to be pouring approximately $35 million worth of wine in the United States down the drain. The business is also working with its American distributors to highly discount many bottles of lower end wine that are getting close to the expiration dates.
That move is expected to cost the company an additional $40 million. The chief executive of Treasury Wine Estates describes the tough decision stating “The intent is to rebase the US inventory levels...a one off rebasing of inventory levels in the US... taking that excess inventory out of the system and we don’t see it as an ongoing process.”
The drastic overstock was blamed on over-estimating the sales of new product launches in addition to better storage capabilities in the US that reduced the need for large stock supplies.
As a general rule luxury wines often get better during the aging process whereas those that are on the cheaper end of the spectrum are meant to be consumed not long after bottling, otherwise the contents deteriorate.