AUS: Casella Wines calms FY losses
The strong Australian dollar has hit the owner of Yellow Tail, Casella Wines
Casella Wines has played down its first losses in 20 years, maintaining that it is well-placed for the long term.
The Australian family-owned firm, which produces the Yellow Tail wine brand, posted losses of AUD30m (US$31.6m) for its most recent fiscal year earlier this week. The performance, which the company has blamed on the strong Australian dollar, has put Casella Wines in breach of its debt covenants with National Australia Bank, according to local reports.
However, speaking to Australia’s The Shout yesterday (16 January), MD John Casella played down the weak numbers. “That loss wasn't an actual loss, there were some write-downs in that," he told the website. "The majority of those are internal loans, it really doesn't change our cash position, it's purely an accounting thing."
John Casella was also keen to highlight the firm’s recent volumes performance. "One thing you need to keep in mind, we've had the biggest six months ever at Casella Wines, in packaged products," he said. "We don't have a volume problem, not by any measure. It's just a margin problem because of the dollar."
"We're just doing what we should be doing as a good business – looking at costs, looking at where we can save and looking at ways of staying competitive in a very difficult environment."
When contacted by just-drinks today, a spokesperson said that John Casella is on annual leave.
Reports during the Summer claimed that the company will launch a new premium wine brand in the US in 2013 that will sell for around 50% more than its Yellow Tail brand.
Casella has also looked to strengthen its beer presence. In August, it said it will partner with Coca-Cola Amatil to form the Australian Beer Company. The JV, which comes into effect in December this year, will be responsible for the brewing and marketing of Casella's beer brands in Australia.
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