AUS/UK: Australian dollar not sole reason for Aus struggles - Australian Vintage CEO
The CEO of Australian Vintage has warned Australian wine firms not to wait for the exchange rate to improve
The head of Australian Vintage has warned that the country's wine industry should not rely on an improvement in the exchange rate to return the sector to export growth.
The country has seen a brace of companies struggle of late. Earlier this month, Casella Wines, which produces the Yellow Tail brand, posted its first loss for 20 years. This was followed last week by news that Barossa Valley Estate has called in receivers.
Casella, which owns the Yellow Tail wine brand, blamed its performance in part on the strength of the Australian dollar against the US dollar.
Speaking exclusively to just-drinks earlier today (29 January), Australian Vintage CEO Neil McGuigan said that the plight of the Australian dollar abroad is not enough of a reason for the category's travails. “If you're not building your brand or being innovative with your wine styles or how you talk to your customers, then you're not going to grow your business,” McGuigan said. “It won't be the case that, when the dollar changes, it will all be great.
“The wine industry has been saying for a long time that it's tough,” he continued. “The Australian dollar isn't helping us, and that's the main reason why we've got a bit of a problem."
While the company appears to be weathering the storm. McGuigan said Australian Vintage is not where it would like to be in its export markets. “We're profitable,” McGuigan said. “We're going in the right direction. But, we're not happy with the returns we're getting.
“In exports, we haven't done the job that we want to in Europe – there are still huge opportunities in this region. Canada is also a huge opportunity for us, and we need to work on that. In Asia, we're going well, but to really crack China, you need to be with one of the big state-owned enterprises: We're working our way through that, but it's not going to happen overnight.
“I'm buoyed that we still have opportunities,” he concluded. “The dollar will get better, but I'm not banking on it.”
McGuigan was in London for the launch of Australian Vintage's food and wine-matching tie-up with celebrity chef John Torode, earlier today.
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