Clarke was responding to Merrill Lynch’s David Errington, a longtime critic of TWE’s perseverance in the US, who questioned the logic of deepening the company’s American ties just as it is getting back on track.
“The company is performing very, very well, you’ve had a fantastic 12 months. You’ve upgraded earnings by five or ten per cent," Errington told Clarke.
“Can you convince us that this is the right way to go, other than just the financials, because the US has been a graveyard for TWE for 20 years. The UK has been a graveyard for TWE for a long time.
“Have you got the management on the ground? Have you got the distribution availability? Do you have the ability to get the right team? Because the performance in the US hasn’t been that great,” he said.
Clarke reassured investors that the company is well placed to make a success of its expanded presence in the US.
“We’ve recruited two new people into that leadership team in the last 18 months. We had a strong start, a strong capability in that team when I joined the company, we’ve strengthened it even further,” he said.
“We have a very good partnership with our distributors… the distributors see that we are serious about growing our wine business in the US.”
TWE on Wednesday agreed to acquire the majority of assets from Diageo’s US and UK wine operations for a cash payment of US$552 million (A$754 million) and the assumption of capitalised leases of US$48 million (A$66 million).
Key US brands to be acquired include Beaulieu Vineyards, Sterling Vineyards, Acacia, Provenance and Hewitt, as well as the Blossom Hill brand in the UK.
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