07/16/2013 11:00 EDT | Updated 09/15/2013 05:12 EDT

Australian winery to dump $35M worth of wine down the drain

One of Australia's largest wine companies plans to pour out about a million bottles of wine and spend $40 million heavily discounting what's left because its lower-end products are too old and about to expire.

Treasury Wine Estates, which makes many prominent Australian wine brands including Lindemans, Penfolds, Rosemount and Wolf Blass, told investors in a statement Monday that it is working with its American-based wine selling partners to get rid millions of the company's "excess, aged and deteriorating" bottles of wine, because they are sitting on warehouse shelves, spoiling.

"This includes action to destroy their old and aged commercial stock, ensuring that only the freshest and highest quality wines are available for brand conscious US consumers," the company said.

If properly stored and transported, wine will improve with age and could theoretically benefit from being saved for a longer time before opening. But the wine included in the writedown is mainly on the lower end of the market — wines that are meant to be consumed shortly after bottling because they actually deterioriate over time.

The value of the wine to be destroyed is $35 million Australian, or about $33.6 million Canadian. In a release, the company also said it's going to spend an additional $40 million to discount what's left on U.S. shelves to consumers.

"TWE has worked hard to establish a reputation for quality," the company's CEO David Dearie said. "We remain committed to providing trusted and iconic brands for our loyal consumers, and this commitment has resulted in our decision to work with our partners to destroy old and out-of-date product in the US distribution network."

It's not believed any Canadian wine sellers are included in the action, but CBC News is working to check the accuracy of that contention.