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Tag Archives: Wine Curmudgeon

Treasury Wine Estate’s plan to avoid a hostile takeover

winenews

Treasury hostile takeoverThe Wine Curmudgeon mentions Treasury’s scheme for two reasons. First, and most importantly, it doesn’t seem very sustainable. The troubled Australian multi-national wine company, whose holdings include California’s Beringer, has been losing more millions than most of us have socks.

Yet, despite its problems, Treasury wants to boost business to fend off a hostile takeover from private equity firm Kohlberg Kravis Roberts, which tried to buy Treasury earlier this year and made another offer this week. The second offer was a little higher, but probably won’t scare anyone.

Treasury’s anti-takeover plan features selling heavily discounted wine refrigerators to customers in Australia. The Brisbane Times newspaper reports that the company’s new boss “labelled the wine cabinet promotion the biggest consumer-facing promotion ever undertaken by the company.” Which should tell us all we need to know about Treasury’s lack of marketing ability.

How does it work? Buy six bottles of a Penfolds Bin wine, which cost from AU$30 to AU$80 a bottle, and you can buy a AU$650 wine fridge for AU$200. In other words, buy six bottles of AU$30 Penfolds Bin 51 Eden Valley riesling and the refrigerator and pay AU$380 — just 58 percent of what the refrigerator would cost by itself. Given retail discounting, in fact, you could probably get the fridge for at least 50 percent off. Is it any wonder that Treasury wrote down AU$260 million earlier this year and fired its CEO?

The second reason I mention this? The Wine Curmudgeon, financial genius that he is, bought 100 shares of Treasury stock in hopes KKR (as we high-flying investment types call Kohlberg Kravis Roberts) would make another, much higher offer for Treasury. My retirement to Burgundy never seemed so close.

I paid about what KKR offered the first time, so news that Treasury seems to be throwing away money on the refrigerator promotion is not welcome. The company is reducing inventory and margins to increase cash flow, which will not boost its value or make me rich. KKR’s second, not much higher, offer confirmed this.

In the wine business, the old joke always seems to apply. Or, as one actual real-life financial type told me: “With a little luck, you might get a nice bottle of wine out of this.”

Who has the best job in wine?

winetrends
best job in wine

And I don’t even have to wear a tie.

The Wine Curmudgeon, of course. I drink wine and tell people what it tastes like. How much better does any job — in wine or otherwise — get than that?

Which is why I was surprised to see this, “10 of the world’s best jobs in wine,” from the British trade magazine, The Drinks Business. Wine writing was only fourth, and while it was rated ahead of vineyard worker at No. 6 (No. 6? obviously written by someone who has never picked grapes on a 100-degree day for minimum wage or piecework), it was outranked by cellar manager, vineyard owner, and winemaker.

The rest of the list: 10, sommelier; 9, airline wine consultant; 8, wine brand owner; 7, tasting room manager; and 5, wine shop owner.

Of those that rank ahead of writing, I can understand winemaker, given that’s the whole point of wine. But vineyard owner? That’s farming, which combines the joy of picking grapes with the delight of exchanging spreadsheets with bankers, all the while staring at the sky and cursing the weather. And cellar manager? Consider these duties: Hiring people to work in the winery’s cellar and maintaining equipment. Hiring is bad enough, but maintaining equipment? Talk about chalk on a blackboard.

This is not meant as a criticism of any of these jobs, and anyone who enjoys them and does them well has my respect and admiration. Rather, it’s to note that I fully appreciate my good fortune in doing what I do. Yes, it’s sometimes work, whether grinding out a blog post when my brain is somewhere else, or tasting my way through a couple of dozen wines that not only taste the same, but are as stupid as a TV reality show. But it’s not working in a coal mine or behind the broiler at Burger King; I’m indoors, people respect my opinion, and I get to taste some tremendous wine. How much luckier can one person be?

Image courtesy of Vinography, using a Creative Commons license

Fourth of July 2014

fireworks

The blog is mostly off today for the holiday, but will return on Monday with our usual features, including the cheap wine book giveaway with Jon Thorsen, the Reverse Wine Snob. Enjoy July 4, and especially this video — Linda Ronstadt, Emmylou Harris, and Dolly Parton from the incredible Trio II, singing “High Sierra” (courtesy of jpspanishfan2 at YouTube). Harmony doesn’t get much better than this.

And you don’t have to be of a certain age to understand what music lost when Ronstadt, who has Parkinson’s, realized she couldn’t sing anymore.

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