Treasury Wine Estates will be hit to the tune of around US$65m by the settlement of its dispute in the US with Republic National Distribution Co (RNDC).
The Penfolds owner has been impacted to such a degree by RNDC’s withdrawal from California in June last year that the matter contributed to a pause of its share buyback scheme in October “until there [was] greater clarity around trading conditions and expectations”. Today (10 February), however, Treasury confirmed that a settlement agreement regarding inventory still held by RNDC has been reached.
The deal will see the wine group buy back inventory from its Treasury Americas and Treasury Collective units that had been held by RNDC in California. The transaction cost, based on the “original sale value net of a confidential settlement that compensates Treasury for the impact of RNDC’s closure in the state”, comprises a net cash outflow of “approximately” $65m.
The cash outflow, which is in line with the $64.7m value estimated by Treasury in October, will weigh on the group’s results for H2 fiscal 2026, which runs until the end of June.
“Treasury will continue to partner with RNDC to distribute its portfolio across a number of other US markets,” the company said, “and is supportive of RNDC’s recent initiatives to strengthen their business model and capital structure, including the planned divestment of several markets to Reyes Beverage Group and the establishment of new financing arrangements.”
Treasury, which will report its results from the first half of fiscal 2026 on Monday (16 February), switched its California distributor partner to Breakthru Beverage Group from the start of September.
