Treasury Wine Estates (TWE) has given an update to the ASX on the impact to its operations following a decline in wine sales and tariffs being implemented in the United States.

TWE said has been advised by Republic National Distributing Company (RNDC), one of its US distributors, that it will cease operations in California, effective 2 September 2025.

In the first half of FY25, RNDC California accounted for approximately 25% of Treasury Americas’ NSR, and approximately 10% of Group NSR.

TWE now expects its FY25 EBITS to be approximately $770 million, down from its previously provided outlook of approximately $780 million, driven by lower than expected premium portfolio shipments in the US, where “economic uncertainty and weaker consumer demand has recently impacted wine category performance at price points below US$15”.

RNDC is quitting California in September as a result of major contracts ending in the state in recent months, including Brown-Forman shifting products to rival distributor Reyes Beverage Group.

“We’ve made the difficult business decision to withdraw from California which affects many of the roles in the state,” said a spokesperson for RNDC.

TWE said it was seeking alternative arrangements for distribution in the large Californian market.

Earlier this year, Tito’s Handmade Vodka also moved its California distribution from RNDC to Reyes Beverage Group.

Worldwide consumption of wine fell in 2024 to its lowest level in more than 60 years, according to the International Organisation of Vine and Wine.  

Wine sales in the US suffered an approximate 6% decline in 2024, according to data from the industry data group SipSource.

Lion’s Sam Fischer appointed TWE CEO