Australia’s largest wine producer has said it is writing down and selling off its cheapest labels, including well-known brands Wolf Blass and Blossom Hill, as it responds to consumer tastes moving upmarket.

Treasury Wine Estates announced on Tuesday it planned to divest its low-end commercial wines division, which also includes the Lindeman’s and Yellowglen labels, as it focuses on its more premium brands, including Penfolds, 19 Crimes, Wynns and Squealing Pig that sell at a higher price point.

Lower volumes of low- and mid-priced wines in recent years have had a financial impact on the company, with the four brands put up for sale now contributing less than 5 per cent of TWE’s profit. The group said it would book a A$290mn (US$189mn) non-cash writedown on the value of its commercial business in annual results due to be announced next week.