The challenge:

“We had multiple banks providing multiple arrangements in multiple countries,” says Bijan Taghian, Group Treasurer at Treasury Wine Estates. “We therefore had non-standard terms, an inefficient structure, in that we weren’t consolidating our spend in order to get a stronger rebate programme, nor were we using the cards to generate working capital solutions – they were strictly for travel and entertainment (T&E). Treasury partnered up with our commercial services team, who are a big driver of positive change within our organisation, to find a solution.”

The first goal was to find a global bank which could match TWE’s global footprint. The second was to achieve standard terms and documentation. “We wanted to treat the card programme like our other debt facilities,” says Taghian.

The solution:

TWE asked Bank of America Merrill Lynch to provide a global corporate card programme. “The card programme was more than just T&E – we were looking to introduce innovative working capital solutions that would help us across our supply chain, particularly on the payables side,” says Taghian.

The solution was to incorporate up to 3,000 cards around the world, all of which would be covered by a global master corporate card agreement with local country schedules. “The solution is scalable, so if we go into a new market, we don’t have to execute a new agreement – we can execute an appendix to the master agreement,” Taghian explains. The solution also features host-to-host connectivity between the bank and the company’s expense management systems.

Another key feature of the solution is the ability to provide customised artwork for the plastic cards. “From a marketing perspective it’s very important for a brand-focused company to have a piece of plastic that reflects the company’s brands, heritage and ideology,” says Taghian. “We have also discussed the possibility of having different cards in different markets to reflect the wines we sell in each market – such as Penfolds in Asia and Beringer in the US.”

Best practice and innovation:

One of the most innovative features of the solution relates to linking it to the company’s core credit document.

What we were able to do with Bank of America Merrill Lynch, which is very innovative for a corporate card facility, was connect the programme to our common terms deed. We now have common terms for our corporate card programme and for our other core debt facilities. The real innovation is getting away from seeing cards as just an expense management tool to seeing them as a value-added, working capital creating, financing solution” says Taghian.

As Taghian concludes, “the card has gone from being an expense management tool to actually generating value for the company.”