US: Willamette Valley Vineyards posts drop in profits
Willamette Valley Vineyards posted a drop in 2008 profits today (1 April) as a result of increased expenses and a reduction in gross profits.
For the 12-month period to 31 December, profits at the company dropped by 58% to US$708,594, while revenue decreased 4% to $16.05bn.
Gross margin for 2008 stood at $7.81bn compared to $8.28bn in 2007.
The reduction in gross profits accounted for around one third of the change from a year earlier and increases in selling, general and administrative expenses accounted for about two thirds of the unfavourable change, the company said.
The firm was equally affected by inventory shrinkage of purchased wines and glassware for resale through Bacchus Fine Wines, outages of three Pinot Noir products due to high demand in 2007 and reduced sales of Willamette Valley Vineyards' wines.
Management said it has made staffing and process changes to minimise shrinkage, increase the production of Pinot Noir products and improve the sales of winery produced wines.
A new key manager reporting to the CEO was added in December to supervise inventory, purchasing, shipping logistics, and Bacchus delivery in an effort to reduce the costs and inventory issues, Willamette said.
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