Aug 6 (Reuters) - Top Australian winemaker Treasury Wine

Estates ( TSRYF ) unveiled plans on Tuesday to divest its

commercial brand portfolio amid challenging market conditions,

and flagged a non-cash impairment charge in relation to its

premium brands business.

The adverse conditions in the commercial wine business have

offset the benefits from a focus to premiumise the premium brand

portfolio, Treasury Wine said in a statement.

The commercial wine business contributed only 5% to total

gross profit in fiscal 2024, and an assessment reflected

moderated top-line expectations as a result of challenging

market conditions across all markets, the wine producer said.

Last year, Treasury Wine had flagged about tough market

conditions and a challenging consumption outlook for its

commercial-grade wine, especially in Australia and the UK, amid

high inflation.

Treasury Wine is present in three price segments - luxury

(more than A$30 per bottle), premium (between A$10 and A$30) and

commercial (below A$10).

Its commercial brands include Wolf Blass, Yellowglen,

Lindeman's and Blossom Hill, while the priority premium segment

houses Wynn's, Pepperjack, Squealing Pig and 19 Crimes.

"The market will like that TWE is looking to divest its

commercial brands. Given limited demand however, we do not

expect TWE to receive much in the way of proceeds for the

commercial brands," said E&P Capital analyst Philip Kimber.

Shares of Melbourne-based Treasury Wines rose 1.7% in early

trade, while the benchmark stock index was up 0.3% after

two sessions of sharp sell-offs.

Treasury Wine declined to comment when Reuters contacted for

further details on the divestment.

The company said its fiscal 2024 results would include an

impairment charge of A$290 million ($188.65 million) after tax

in relation to its premium brands division, but forecast a near

13% rise in underlying earnings.

($1 = 1.5373 Australian dollars)

(Reporting by Ayushman Ojha; Editing by Shilpi Majumdar and

Subhranshu Sahu)