Dearie's parting shot at Treasury
Ousted Treasury Wine Estates boss David Dearie has dismissed allegations by his former chairman that he lacked sufficient operational skills to lead the winemaker, openly contradicting Paul Rayner's key message to the market last month for the former chief executive's ejection from the company.
Mr Dearie has also mounted a thinly veiled criticism of Treasury Wine's board, whose brands include Penfolds, Wynns and Saltram, warning the world was full of failed wine companies that adopted short-term strategies around management and production.
"You have got to take - and this is always a challenge with the wine category - a long-term view, it's a long-term approach, markets tend to look at things very short-term, so you've got that dichotomy of who is right.
"There are so many failed wine companies who have looked short-term," he cautioned.
Speaking exclusively to BusinessDay for his first interview since leaving in September, Mr Dearie defended his turnaround strategy, saying it was showing signs of working, blamed much of July's damaging $160 million write-down of poor-quality wine in the US on previous management and board decisions, and disputed Mr Rayner's claim he was only an interim boss.
The critique comes at a particularly tough time for Treasury Wine, which this week was threatened with a class-action lawsuit by aggrieved shareholders over its multimillion-dollar write-down linked to its US business.
Mr Dearie said he could not understand Mr Rayner's comments in a press release announcing his departure on September 23 that Treasury Wine directors believed it needed "a leader with stronger operational focus".
"I don't know what was meant by 'operational' experience," Mr Dearie said, "I had been chief operating officer in the past. So you need to ask the chairman what he meant by those comments."
Mr Dearie also disputed Mr Rayner's statement at a press conference that his appointment as CEO after Treasury Wine's 2010 demerger from Foster's was really only an interim role. "[Mr Dearie] was the appropriate person to kick the company off as a public company," Mr Rayner said last month, "I think though to take us to the next level we need ... a new CEO."
"That was never my understanding," Mr Dearie said on Wednesday.
"The board have got to make their decisions and that's what they have done and you live with those decisions, but the wine category is a long-term category," he said.
Mr Dearie insists Treasury made "smart decisions" by providing the groundwork for some luxury wines aimed at generating future profits, but these measures would take time to come to market.
Previous decisions by management and directors to pump the market full of cheap, commercial wine was a mistake.
This would later emerge as a trigger for July's write-down, with Mr Dearie forced to pour $35 million worth of undrinkable wine down the drain.
"We had a lot more commercial wine than we would like, and that was as a result of decisions made many years ago to focus on the faster moving consumer goods [segment]."
A spokesman for Treasury Wine said the company had fully explained the reasons for the decision to replace Mr Dearie.
"We stand behind those reasons, and have no further public comment to make on this matter."
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