Treasury Wine flags $260m writedown

Treasury Wines (TWE) will book an impairment charge of up to $260 million in fiscal 2014 as it looks to draw a line under a troubled 12 months with a new business model.

The charge is the latest in a long string of writedowns at Treasury Wine and former wine business of Fosters Group, after the company overpaid for assets at the top of the market.

The winemaker said the non-cash brand and related asset-impairment charge reflected a combination of historical prices paid for pre-demerger acquisitions and the decline in market growth rates for wine globally.

Treasury Wine last month knocked back a takeover offer from private equity giant KKR worth some $3.05 billion, saying it was too low. There has been persistent speculation that the troubled winemaker remains a takeover target.

Treasury chief executive Michael Clark said the impairment showed the company needs to do things differently, but said he hoped fiscal 2015 would be a "reset" year for the group.

"We have already taken significant steps to reset consumer marketing investment, our cost base and business model, and over the coming year we must fully realise the benefits of these changes," he said.

Among the changes will be the changing of the release date of Treasury's flagship Penfolds wines, a boost to consumer marketing, as well as a focus on the group's Australian commercial portfolio separately from its luxury and masstige portfolio.