McGuigan Simeon has said that, during Australia's current droughts, water is of primary concern for the wine industry.

The Australian wine company said to shareholders at its AGM today (28 November), that it has recently faced challenges with the weather, however it is in a "sound position" and expects to see a "small profit for the full financial year".

McGuigan Simeon chairman David Clarke said: "At the present time, success in the Australian wine industry depends more than anything else on water."

"I am pleased to be able to say that the Australian wine industry is showing signs of recovery and we have weathered the storm", Clarke continued. "In the past, we have said 2008 would be a very challenging year, but I can report we are making good progress."

McGuigan chief executive Dane Hudson added that the company was also confident with its new global distributor relationships.

McGuigan CEO Dane Hudson added: "We have entered into 18 new distributors relationships including WaverleyTBS in the UK, Groupe LFE (Netherlands) and Rotor House (Russia). These relationships are showing real momentum."

In August, the wine company reported that net losses for the year to the end of June came in at A$5.94m (US$4.78m), although the figure was an improvement on the A$14.84m loss posted in 2005-2006.

Sales for the year also slipped, by 8% to A$286.7m, despite an 8% lift in sales volumes, which came in at 192m litres.