Treasury Wine Estates has announced further progress on plans to deliver the future state premium US wine business, with an agreement reached with The Wine Group in relation to several of TWE’s commercial tier brands from its US portfolio.

Under the terms of the long-term licensing agreement , which was effective as of March 9, 2021 (US Pacific time), The Wine Group will source and sell the Beringer Main & Vine, Beringer Founders’ Estate, Coastal Estates and Meridian brands in the Americas.

The Wine Group will acquire existing inventories associated with these brands on a progressive drawdown basis and will assume responsibility for related future bulk wine supply contracts.

TWE’s chief executive officer Tim Ford said, “We are delighted to be entering into this long-term transaction with The Wine Group, which will be of mutual long-term benefit to our respective organisations”.

“For TWE, this transaction is a significant milestone towards our plans to deliver the future state premium US wine business and we can now focus solely on continuing the growth of our premium brand portfolio to drive future performance in the Americas.

“The Wine Group is a leader in the industry with strong wine brands that deliver unbeatable value,” said Cate Hardy, CEO of The Wine Group.

“The acquisition of these popular brands further positions The Wine Group as a global leader in wine. Adding these brands complements TWG’s leadership in the value segment alongside our growing portfolio of premium wines, introducing more consumers to our high quality wines at every price point.”

As outlined in the 1H21 results announcement, TWE is implementing plans intended to deliver a premium focused business in the Americas with broadly half the volume, similar earnings over time and progress towards the target regional EBITS margin of 25%.

TWE expects to generate one-off net cash inflow of at least AUD$300m as part of these plans.

TWE says this announcement, which will generate cash proceeds of approximately AUD$100m, is a meaningful step towards these goals.

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