Treasury Wine Estates will take a $558.4 million charge over weaker U.S. wine demand.

Treasury Wine Estates said Tuesday that it will cut grape production in parts of its U.S. business, idle some vineyards in California’s North Coast and take a new after-tax charge of $558.4 million in fiscal 2026 as it tries to bring its American supply chain back in line with weaker demand.

The Australian wine company, one of the world’s largest producers and marketers of wine, said the additional one-time charge will be recorded on top of an impairment already recognized in the first half of fiscal 2026. The new hit is tied to non-cash write-downs of U.S. assets and further reductions in the value of some of its brands.

The company said the moves are meant to “rebalance” its U.S. supply chain and speed up improvements in returns from its Americas division. Treasury Wine Estates owns or manages more than 10,000 hectares of vineyards around the world and reported about $1.7 billion in revenue in 2025. Its portfolio includes Penfolds, Daou Vineyards, 19 Crimes, Pepperjack, Squealing Pig, Wynns, Matua, Beaulieu Vineyard, Frank Family Vineyards and Castello di Gabbiano.

In the United States, the company said it will reduce production volumes from vineyards in the North Coast and place other sites into dormancy to lower the amount of grapes harvested and delivered each year. It also said it will write down related assets to reflect lower expected future use across that network, including both owned and leased vineyards. Treasury Wine Estates said it will also mark down inventory, mostly bulk wine, that it expects to move through sales into bulk wine markets and through internal reclassification.

The announcement adds detail to a strategic and operating review of the company’s Americas business that Treasury Wine Estates disclosed in early June. At the time, the group told investors that a major focus of the review would be what it called a structural imbalance in its U.S. supply chain. The company said then that a weaker demand outlook, flagged in December, had left it with excess capacity across vineyards, wineries and packaging operations, along with elevated inventories from recent harvests.

That imbalance reflects a broader challenge in the U.S. wine market, where producers have been dealing with softer consumer demand, pressure on sales volumes and higher stocks in some categories. For large companies with vertically integrated operations, those shifts can quickly turn into higher carrying costs and underused facilities. Treasury Wine Estates’ response suggests that management now sees the problem as significant enough to justify a sharp reset in production and asset values.

The biggest brand impairments will affect Daou, Frank Family Vineyards and Beaulieu Vineyard, all California labels. Treasury Wine Estates said those write-downs follow a review of carrying values as of June 30, 2026. Daou, based in Paso Robles, has been one of the company’s best-known luxury acquisitions in the United States. Frank Family Vineyards and Beaulieu Vineyard are both established names in Napa Valley. The fact that all three are now subject to write-downs points to a reassessment not only of inventory and vineyard use, but also of future earnings expectations for some of the company’s premium U.S. brands.

The actions announced Tuesday also sit alongside the company’s broader Ascent transformation program, which Treasury Wine Estates has presented as a multi-year effort to reshape its portfolio and cost base. During its investor day, the group had already outlined reductions in vineyard acreage and changes to winemaking and packaging facilities to support a future portfolio structure. Tuesday’s announcement made clear that the U.S. reset goes further, with new supply chain measures and the large non-cash charge attached to them.

Even with the write-downs, Treasury Wine Estates said its underlying earnings remain stronger than previously expected. The company said its fiscal 2026 EBITS, before material items and still unaudited, is expected to reach $492.3 million. That would put it above the guidance range of $480 million to $490 million given at investor day. Treasury Wine Estates said the better result was driven mainly by Penfolds, its flagship Australian brand, which has continued to outperform.

Management also signaled that 2027 is likely to look much like 2026 at the operating level. The company said the strength of Penfolds and cost benefits from the Ascent program should offset weakness in the United States as the business continues to rebalance inventories held by customers. That suggests Treasury Wine Estates does not expect a quick recovery in its U.S. operations, even as it moves to reduce supply and cut costs.

The company’s global footprint has helped cushion that pressure. Beyond its assets in Napa Valley and Paso Robles, Treasury Wine Estates has vineyards and operations in regions including Barossa Valley and Coonawarra in Australia, Marlborough in New Zealand, Bordeaux in France, Tuscany in Italy and Ningxia in China. That geographic spread has long been a selling point for investors, giving the company exposure to multiple price points and markets. But the latest announcement shows how heavily its U.S. business still weighs on overall strategy when market conditions change.

Sam Fischer, Treasury Wine Estates’ chief executive, said the company was acting decisively to align supply with what it sees as a realistic view of future demand in an evolving U.S. wine market. He said both the Ascent transformation program and the strategic review of options for the future of the company’s U.S. operations were making progress. Fischer also said the underlying momentum of the broader business remained positive.

His comments underline the message Treasury Wine Estates is trying to send to investors: that the company is prepared to absorb a large accounting charge now in exchange for a leaner U.S. operation and better medium-term profitability in the Americas. The immediate effect, however, is a substantial reduction in the book value of vineyards, inventory and brands tied to California, and a clear sign that one of the wine industry’s largest groups sees slower demand in the United States as more than a short-term problem.