16 questions lodged at 2021 Treasury Wine Estates AGM

October 25, 2021

Questions lodged by Stephen Mayne at the 2021 TWE AGM, plus a brief summary of the response.

1. There are 5 proxy advisers in the Australian market – Ownership Matters, ISS, CGI Glass Lewis, ACSI and the ASA. We know ASA is recommending & voting in favour of all items. Have any of the other proxy advisers gone against the board's voting recommendations today and if so, please provide the details? Have there been any material proxy votes against any of the items of business and will these be disclosed before the debate on each item?

No protests.

2. Could Toni Korsanis please comment on why she is too busy to continue serving on the Crown Resorts board, but has enough time to step up and become chair of the TWE audit committee, even though she recently became "executive vice chair" of global gambling company, Scientific Games. Could Toni please clarify why she quit Crown and how much time she is committing as an executive at Scientific Games.

Chair: no comment on other companies. Very comfortable she has the time to keep doing a great job.

3. Has the demerger of Endeavour Group from Woolworths had any impact on TWE? Roughly what proportion of our Australian sales used to go through Woolworths before the Pandemic and the demerger and has this increased or decreased during the pandemic?

Chair: Endeavour important. CEO: no discernible impact. Relationship gone to longer term strategic level. Steve Donohue great as we've transitioned our operating model. Very pleased where it sits. EDG 8% in FY21. Retail became larger.

4. Paul Rayner has been chair for the past 9 years and a director for ten and a half years. Can he cite another ASX200 company which has had the same independent chair for the past 9 years, how much longer does he intend to serve and does he believe his successor is currently serving on the board.

Chair: yeah, proud of performance. Will go over the next 1-3 years. Robust succession plan in place.

5. Congratulations to all of the directors for agreeing to voluntarily put themselves up for election every year since 2019, rather the opting for the normal 3 year terms. Annual elections is best practice and mandatory in other markets such as the UK and the US. What sparked this excellent move in 2019 and why hasn't any other ASX-listed company followed suit, including boards such as Boral, Qantas, Myer, Webjet, Crown and the like where our directors have served in recent years. Have you thought about enshrining annual elections into our constitution and at the same time removing the onerous requirements for external candidates to nominate for the TWE board?

Chair: I think it is a good process that we've put in place. Helps in succession planning process. Certainly helps in annual review of performance. Really suits our purpose and is good governance.

6. Could Gary Hounsell please explain how his ownership of the Toolangi Winery in the Yarra Valley continues whilst he serves on the TWE board. He's also very busy so could he explain how much of his time Toolangi takes and what protocols are in place regarding information sharing given that a small competitor is sitting inside our board room. Are there any, or have there every been, dealings between Toolangi and TWE?

Chair: he sold it. Knowledge of wine industry invaluable.

7. The approach of public company directors to the widely rorted $90 billion JobKeeper scheme has been under intense scrutiny with some companies choosing to pay JobKeeper receipts back to the ATO. Could we hear from the chair and CEO on how TWE played JobKeeper and are we aware of how widely accessed the scheme was within the broader Australian wine industry? Did it prop up many of our smaller family owned competitor and could Gary Hounsell disclose if his winery accessed JobKeeper?

Chair: we received nothing.

8. With the recent passing of John Elliott, does anyone on the board know if it was true that he used to regularly drink Grange, even during business meetings, and even once in the 1980s instructed an operative to buy up as much Grange as was available across Australia?

Chair: I did know John, he was not drinking in our meetings.

9. Rather than doing AGM debate as a job lot, supposedly to accommodate slow internet connections of retail shareholders, why not utilise the Link software which allows shareholders to nominate the item of business they wish to ask questions on? Also, Link's system retains a record of those questions asked that the shareholder can see. With Lumi, the written questions just disappear into the ether.

Answer: we use Lumi.

10. Have we considered doing a 15% share placement to a Chinese government entity in order to facilitate the re-opening of the Chinese market. This seems to have worked for Fortescue Metals. Please outline what lobbying steps the company has undertaken in order to win favour with Beijing and which other global wine producers have been excluded from the Chinese market. Finally, does the ban extend to Hong Kong and have our sales in Taiwan increased since the Chinese ban came into place.

Chair: we are not banned in Hong Kong.

11. We are currently embroiled in a class action where the two biggest class action law firms in Australia, Maurice Blackburn and Slater and Gordon, are jointly taking us on. How did these two traditional competitors come to be working together against us and please provide an update on where the case is at, including the likely timetable for a trial. Are we determined to fight all the way, like the Gary Hounsell-chaired Myer did, or are we going to settle as we did in 2017 with Maurice Blackburn, when $49 million was handed over, without any admissions, of course!

Chair: defend vigorously.

12. The annual report claims that we have almost 88,000 shareholders. When disclosing the outcome of all resolutions on your website, could you please advise how many shareholders voted for and against, similar to what happens with a scheme of arrangement? Rather than the outcome being swamped by big institutional holders, this will provide a better gauge of retail shareholders sentiment on all resolutions and was a new best practice disclosure initiative recently adopted by Metcash and Southern Cross Media after their AGMs.

Chair: we will follow the listing rules, so no.

13. Could the CEO and chair please comment on how regularly they are in contact with the former CEO Michael Clarke and are we still paying him for advice or engaging with him as a shareholder. Are there any incentive shares for the former CEO still in play and is he still a shareholder?

Chair: not in regular contact, only spoken once. Receiving no money and giving no advice. Intend to play golf with him in UK and still one year of LTIP in play. Not sure if remains a shareholder.

14. What discounts to the recommended retail price do the directors get when buying our wine? Does the same deal apply to our senior executives and the regular staff and are there any differences in the terms for wine purchasing for directors, executives and staff located in different geographies?

Chair: we get a discount. Think same as all staff. Not a huge discount, let me assure you. CEO: Confirm we have the same price list across the globe.

15. Brands such as AAMI have ended their relationship with the Spring Racing Carnival due to growing concerns over animal cruelty and gambling. What is our position on this ESG issue? Looking at ESG more broadly, are we aware of any institutional investors who have sold out of TWE due to concerns about being associated with the alcohol industry, which has been accused of selling an addictive product which causes considerable harm.

Chair: very happy with Spring Racing Carnival sponsorship and not aware of any insto divestment. CEO: Wonderful marketing opportunity to lead in this space.

16. Why do you put the name, firm and phone number of 15 analysts who cover TWE on your website? This is uncommon in Australia. Do you have approval from all these analysts to disclose their details and encourage shareholders to ring them and why don't you make access easier by also including their email addresses?

Chair: I assume we have their approval. CFO: I can confirm we do have approval. Helps with research.