Treasury Wine Estates names Michael Clarke as new chief executive

(TheAustralian) - TREASURY Wine Estates has appointed former Kraft and Coca-Cola executive Michael Clarke as its new chief executive replacing board member Warwick Every-Burns.

The London-based, South African-born, Mr Clarke has worked with Coke in Australia and will move to Melbourne for the job.

Mr Clarke will join TWE in March and commence a handover with Mr Every-Burns, who was drafted in from the board following Mr Dearie’s departure in September.

The announcement came as TWE reported a doubling of net profit to $106.2 million, boosted by a one-off tax windfall of $80.5m.

However earnings before interest, tax, depreciation and SGARA — an accounting adjustment for the fluctuating value of vineyard assets _ were down 38 per cent to $45.8m, as the company increased spending on marketing and distribution and faced challenging conditions in both the Asian and Australian markets.

“Overall, TWE’s first half was disappointing,” Mr Every-Burns said.

“While we had expected the first half to be below the prior year principally driven by planned lower shipments in the US and increased investment in marketing and distribution, the extent of the earnings shortfall was exacerbated by much tougher trading conditions in Asia and more recently, a number of factors in Australia.”

Mr Every-Burns said Australian sales volumes were down in the key month of December as the company reduced promotional discounts amid sharp competition in the commercial sparkling and mass-market prestige, or “masstige” white wine categories.

“Furthermore, a renewed focus on liquor inventory levels by some key customers in Australia adversely impacted volume growth in the December quarter and this is expected to continue in the second half of the fiscal year,” he said.

Mr Every-Burns said that despite the “challenging” first half result, the business and the wine industry remained attractive.

“Global supply and demand continue to move towards balance and as evidenced by the improving size and mix of our long term inventory, TWE is well positioned to satisfy the growing consumer demand for premium wine in both existing and new markets and channels,” he said.