Treasury Wine Estates chairman, Paul Rayner has sighted poor reporting systems as a key factor in the company’s decision to write-down $154.3m in inventory.
Rayner told shareholders at the company's annual general meeting yesterday that the loss – which decreased annual net profit by over 50 percent – could have been avoided if the company had more effective reporting systems in place.
Although sufficient in assessing its own stock levels, TWE’s management systems were not set up to assess how much commercial wine – which does not age well – was sitting idle on distributors’ shelves, The Australian reports.
"It's unacceptable that we incurred this loss," said Rayner.
"The information was not available to us, but it now is," he said. "You could argue that it should have been, and I would agree with you if you argued that."
The reporting oversight led the destruction of almost 600,000 cases of old wine costing $34m, and a further $82.4m writedown on the value of bulk wine which was sold at fire sale prices.
The write-down led to the departure of CEO David Dearie last month, with Rayer stating that the business requires a “leader with a stronger operational focus moving forward.”
Warwick Every-Burn, a non-executive member of the board is currently assuming the position as the search for a permanent replacement continues.