Treasury Wine Estates has ousted its CEO over the poor performance of the company's US division. Source: AAP
TREASURY Wine Estates has no intention of selling off its US business, despite ousting its chief executive David Dearie over the poor performance of the division.
The company that owns brands such as Penfolds and Wolf Blass shocked the market on Monday by announcing Mr Dearie's immediate departure.
Investors punished the wine maker, pushing its shares 29 cents lower, or six per cent, to $4.46, their lowest level in more than a year.
Treasury chairman Paul Rayner said the board had decided to search for a new chief executive in the wake of major writedowns, including a controversial decision to pour more than $35 million worth of aged or excess stock down the drain.
"The recent inventory issue in the USA significantly dented our overall performance for fiscal 2013 and was a key factor in this decision," he told investors.
He praised Mr Dearie's contribution to the company since his appointment as chief executive in May 2011, immediately prior to its demerger from Foster's Group.
"But the board believes the company now needs a chief executive with a stronger operational focus and the right balance of skills to deliver our ambitious growth targets."
Despite criticism from investors, Mr Rayner said Treasury will not sell off the US business, centred around Californian winemaker Beringer, which has underperformed since Foster's acquired it for $2.6 billion in 2000.
"The US business is an integral part of our operation," he said.
The company has appointed board member Warwick Every-Burns as interim CEO while it searches for a permanent replacement.
In July, Treasury said it would destroy more than $A35 million of aged and excess stock in the US, and offer major discounts, after admitting it overestimated the amount of wine needed to supply the market.
The discounts and excess stock destruction were part of a broader $A160 million writedown relating to the continued weakness of the US business.
CMC Markets chief analyst Ric Spooner said Treasury was capable of turning around its fortunes in the next few years, despite its current woes.
"The Australian dollar is going to move lower over time and we can expect some sort of pickup in the economic cycle around the world over the next year or two," he said.
"That would all lead into improvements in that premium wine market."
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