Treasury Wine Estates CEO ousted
They don’t mince words down under. “The decision to pour AUD 35 million of wine down the sink was the catalyst for David Dearie’s career at Treasury Wine Estates (TWE) also going down the gurgler,” Australian media commented when TWE announced on 23 September that its CEO was to leave with immediate effect.
TWE, which used to be the Foster’s wine unit until it was spun off in 2011 and now calls itself the world’s largest pure-play wine company with over 80 brands including Beringer, Lindemans, Penfolds, Rosemount Estates and Wolf Blass, announced in July that it would destroy excess stock and make a total of AUD 160 million (USD 150 million) worth of provisions related to its U.S. operations. As if this was not bad enough, it kept on sending out bad news when in August it reported a 50 percent slump in annual net profits.
These losses sealed Mr Dearie’s fate.
Deutsche Bank analyst Michael Simotas was quoted as saying that Mr Dearie’s sudden departure was “not a good sign”. “Although this doesn’t come as too much of a surprise given the disappointing track record, it may be a sign there are additional issues in the business and the search for a replacement will be disruptive,” he commented.
TWE said its non-executive director Warwick Every-Burns would assume the CEO role on an interim basis while the company searched for a permanent successor.
Mr Dearie, previously the UK-based managing director for US liquor group Brown-Forman’s western Europe and African businesses, joined TWE in July 2009 when the company was still a division of brewing giant Foster’s.
He led the company through the demerger with Foster’s in May 2011, since when TWE has been a frequent target of takeover speculation as global wine supply fails to keep up with demand driven by the booming Asian market.
