• Significant inventory reduction as wine intake reaches peak in FY25
• Exit of long-term lease for Millewa Vineyard to remove excess red varietals
• Exiting Millewa Vineyard to provide $8M net cash flow benefit over 3 years

Australian Vintage Ltd (ASX: AVG) has announced that it is accelerating its inventory reduction strategy, including the strategic decision to exit a long-term lease with Fresh Country Farms for the Millewa Vineyard, effective 16 July 2025. The Millewa Vineyard currently yields between 10,000 and 12,000 tonnes of grapes, predominantly red varieties. Exiting this lease will provide AVG with flexibility in its grape sourcing strategy and remove red varietals that are in excess of demand. This is expected to generate a relative net cash flow benefit of over $8 million over the remaining 3-year lease term, taking into account a $2 million exit fee and ongoing payments. The company estimates a significant reduction in wine intake as long-term grower contracts roll off over the next three years. This accelerated inventory reduction strategy is expected to drive improved free cash flow from FY26 onwards.