Australian wine marker Treasury Wine Estates will destroy gallons of wine recently because of weak wine sales in the U.S. The company said it would charge the losses, estimated at $145 million, against its U.S. business for the fiscal year that ended June 30.

Treasury explained the throwing away of older wines that were past their expiration dates to overestimation of the U.S. demand for 2012, particularly for its less-expensive labels.

Wines that were not yet past their drink-by dates were sold at a discount. Unfortunately, it is the inexpensive, low-alcohol content wine labels such as the White Zinfandel that have shorter shelf lives.

While wineries could sell unsold bulk wine to distilleries to process it into brandy or other spirits, but it would be expensive to do that with unsold bottled wine, so wineries would rather recall unsold wine bottles from distributors and retailers and destroy them to recover taxes paid and reduce losses.

Treasury produces also expensive wines such as Penfolds Grange, which sells for $1,000 a bottle. It has other global labels such as Castello di Gabbiano, Chateau St Jean, Greg Norman Estates, Pepperjaclk, Stags' Leap Winery and Wynns Coounawarra Estate.

Treasury Wine was spin off in 2011 from the global beverage brand Foster's Group due to the glut then of Australian grapes and weak wine sales in the U.S. and other overseas markets that weighed on Foster's profit.

Australian wines became popular in the U.S. in the 1990s until about 2005, but wines from other countries such as Argentina, Chile and South Africa had overtaken it.

The destruction of wines would likely lead analysts to downgrade Treasury's profit. Treasury Chief Executive David Dearie had offered its U.S. distributors up to $35 million to destroy its old vintages with lower prices and shorter shelf lives.

The move is to ensure "only the freshest and highest-quality Treasury Wine Estates wine are available and enjoyed by brand-conscious U.S. customers."

Treasury shared dipped by 14 per cent and went down 71 cents on Monday, closing at $5.11. It was the biggest slump in the winemaker's stock price since it was spun off from Fosters in May 2011.