I think there is a lot of risk here. I know there is.
Selling the Karadoc winery is an unmitigated disaster (expressions of interest close today 30.11.23. They will get a very small percentage of what it is valued at in the balance sheet, if they can sell it at all. It's an admission that they have destroyed the Lindemans brand.....they used to sell around 10million cases of Lindemans Bin 65 Chardonnay, til they fkd up the US distribution. Bin 65 was a genuine FMCG, great cash flow, and in the wine business cash is king. There will be more spin than Warnie if they can move Karadoc.
Then about a decade ago, they got rid of the Daigou, yet still shipped them product on the face value that they would get paid after TWE told them there would be no more.....did they get paid.....no. Put some product down the drain sometime after that. Read into that what you will.
Channel stuffing......still goes on.
Consumer spending is down.
Venues are struggling in general (On Premise)
They have laid off sales staff
Gago getting ready for retirement. I know him personally. He's a genius. Will be a massive loss, huge, irreplaceable. Sure, he leaves a template/framework, but he sees things that 9999 out of 10000 winemakers can't. No doubt he will continue to consult on some level, however, but he won't be doing vintage anymore after he retires, and that is where winemakers win the war so to speak.
Inventory is seriously overvalued on the balance sheet, ripe for a write down.
Talk of spinning of Penfolds. Then what do they do with all the no name product??? I'll tell you, keep inventing no name brands that require more marketing budget, more sales effort, then they become dated, and start all over again (think Squealing Pig) that said I believe 19 Crimes has scope.
The China tariff situation. The Chinese prefer Lafite, Margaux, Latour, Ausone, Mouton, Cheval Blanc, Petrus and Le Pin anyway. Far more status than Grange (the Grange price index has not risen for years and is no longer an investment according to the indexed figures)
Where is Wynns?
And, Rosemount. 1 billion down the drain.
Look at their opposition, Accolade and what has recently happened there. This is the same, just a 10 times bigger mistake/scale
IMHO think long and hard about the above.....none of it is good.
I hope this post is appreciated.
DISCLAIMER: All in my opinion only. Not investment advice. Past performances do not necessarily indicate future results.
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