(SMH) - Treasury Wine Estates is selling the T'Gallant, Bailey's and Ryecroft wineries in Australia and the Asti winery in California, and will book $50 million in write-downs in the first step of a cost-cutting overhaul of its winery infrastructure.

The revamp will involve some job losses across the company, which is also shutting the packaging and warehousing functions at its big Karadoc winery near Mildura in Victoria and transferring them to the more modern Wolf Blass winery near Nuriootpa in South Australia's Barossa Valley.

Treasury chief executive Mike Clarke said the cost savings are helping to fund increased investment in advertising and marketing, and the supply-chain revamp is part of "embedding a cost-conscious culture" and making sure the company is able to deliver more consistent and sustainable profit growth.

The T'Gallant cellar door and vineyards on Victoria's Mornington Peninsula are being put up for sale along with the Bailey's winery at Glenrowan in Victoria. The company's Ryecroft winery in the McLaren Vale region in South Australia is also being put up for sale. It was mothballed last November because it was running at only 50 per cent capacity, with winemaking for some of the Rosemount brand labels that it was undertaking transferred to the Wolf Blass winery.

The Karadoc winery near Mildura is one of the biggest in Australia and the packaging and warehousing operations at that plant will be transferred to the Wolf Blass winery in a staged process to be finalised in 2015-16.

Job losses

The Karadoc winery will keep making wine but will focus entirely on lower-end commercial production. A Treasury Wines spokesman said on Tuesday "there will be limited job losses as a result of these changes" but declined to be specific.

Mr Clarke said the changes planned in the United States are also designed to deliver cost savings and make a clear distinction between the luxury and higher-end wines and the lower-priced commercial wines. Treasury is putting the Asti winery in Sonoma County, California on the market and transferring its wine production to two other wineries that it owns nearby.

Treasury is also restructuring its operations at a large bottling centre in the Napa Valley in California to extract more cost savings. Treasury has 83 wine brands and under Mr Clarke's strategy is focusing more on the top-end of the market, led by the flagship Penfolds brand.

The company announced on Tuesday that it would book a total provision of $35 million as a result of the supply-chain changes in Australia and the US, and an extra $15 million in one-off costs to pursue "overhead" cost savings, taking the total write-downs to $50 million for these changes.

The US has been a particular trouble spot for Treasury, which in 2013 famously outlined plans to destroy six million bottles of cheaper wine after a supply-chain debacle under previous management where the warehouses of third-party distributors were overflowing with excess stock of cheaper Treasury brands. Eventually, it destroyed less than half that amount after finding other avenues to deplete stock.