Treasury Wine to make, bottle Accolade wine

GEYSERVILLE and NAPA -- Treasury Wine Estates (ASX: TWE) has agreed to make and package brands for Accolade Wines at Treasury's North Coast facilities.

Under the terms of the signed agreements, Treasury would make Accolade brands at the Asti winery in Sonoma County's Alexander Valley then package the wine at the Napa Bottling Center. Geyser Peak winemaker Ondine Chattan would continue to make the wines.

Accolade has been making Geyser Peak and other brands at that winery in the community of Geyserville in the valley, but Francis Ford Coppola acquired the winery and surrounding vines early this year to eventually expand production.

This arrangement would help fill idle U.S. production capacity for Treasury Wine, according to Stuart McNab, chief supply officer.

"TWE's increased focus on maximising efficiencies in our global supply network has enabled us to leverage spare capacity and generate additional financial returns for our U.S. operations," he said in a statement. "These contracts will help TWE 'win in the Americas,' which is a key strategic focus for us in fiscal '14."

Optimizing the global supply chain has been a long-term strategy for Treasury Wine.

It's the first agreement like this for Treasury Wine in the U.S., but the two companies entered reciprocal packaging deals in Australia and the United Kingdom last year.

The multiyear North Coast packaging contract starts this month, and the production arrangements at Asti will commence with the 2014 vintage.

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