American rapper Snoop Dogg’s celebrity endorsement of the 19 Crimes wine label helped but has not produced the sales Treasury Wine Estates was hoping for, even at an asking price starting at just $12 a bottle, as demand for budget plonk softens in Australia.

Treasury – an ASX-listed winemaker – saw its shares fall over 7 per cent on Thursday after it told investors that, while demand was still strong for its luxury products, the outlook for commercial wines in Australia and the UK remained challenging.

The company said it was reviewing its supply chain to improve its cost of goods sold, and would consider divestment of some of its assets as it works to grow its premium and luxury brands in the current environment.

In an update on the group’s financial performance for 2023 so far, Treasury revealed sales of its entry-level wines showed further signs of deterioration.

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“Specifically, the 19 Crimes portfolio continues to perform below expectations,” the company said.

The 19 Crimes range sells from about $12 a bottle in Australia, or $15 in the US, while the Penfolds brand can run into the range of several hundred dollars a bottle.

The company’s investment in growing the 19 Crimes brand has helped cement its foothold in the US market and appeal to a new cohort of first-time wine drinkers. A partnership with Snoop Dogg to launch the “Cali Red” variety in 2020 helped sales surge.