Time for Treasury to leave sour grapes behind

(BrisbaneTimes) - A 25-year veteran of the beverage, hospitality and wine and spirits industries, is how David Dearie was described by the then Foster’s Group chairman Ian Johnston in late 2010 when the brewer was demerged to create Treasury Wine Estates.

Those were the good old days. When the Foster’s board and investors believed, or perhaps prayed, that by splitting Foster’s beer assets from its global wine business more value would be unlocked and both beverage divisions would be able to better focus on their core labels, markets and customers.

The beverage company’s troublesome US division, which Foster’s, during the boom times, spent billions of dollars of shareholders’ money on to create one of the best US vineyard portfolios in the world, had already cost the tenure of one chief executive, Trevor O’Hoy, and was at the centre of profit downgrades and write-downs.

But investors were promised a change, a fresh outlook and approach, a demerger to solve all these ills.

After the shock ejection of Treasury Wine Estates boss Dearie this morning, the Foster’s wine curse looks very much alive and kicking, and has claimed its next victim.

The rot set in for Dearie in July when the Scot, who joined Foster’s in 2009 as the boss of its Australian and New Zealand wine business, unveiled a surprise $160 million write-off linked to the US wine business, including the fact that Treasury Wine Estates would have to pour up to $35 million of unwanted wine down the drain.

Analysts were aghast, many were angry and some called for his immediate sacking saying they had lost all confidence in the chief executive and his ability to properly and responsibly run the Americas wine operation, which was suffering from an oversupply and a downturn in consumer confidence.

To be fair to Dearie the problems stemming from the Americas, such as unwanted wine sitting in warehouses gathering dust and slowly turning into stuff you would serve to clear a room, were not of his making.