The pricing of Yellow Tail, Australia’s biggest selling bottled wine brand in the United States is the first casualty of the surging Australian dollar.
Prices will rise by 20% by December to offset the impact of the Australian dollar now trading at around US68c.
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Yellow Tail is expected to sell more than 4m cases retailing at between US$5.99 and US$7.50 in the US this year.
Yellow Tail is produced by Casella Wines in the Griffith district of New South Wales. Casella’s chief executive John Casella told just-drinks he did not think the increase, equal to about US$1 a bottle, would bring a slowdown in sales.
Yellow Tail, with its colourful label featuring a wallaby, has startled industry observers with its US success since its introduction in June 2001.
Australia’s seemingly unstoppable wine export boom could be at hazard in key price sensitive markets because of the strengthening Australian dollar.
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By GlobalData
After three years of low values, the local currency has passed the US68c mark and some analysts predict it could hit US73c by the middle of next year. The swiftness of the rise has taken many exporters by surprise.
In 2003 the Australian dollar has gone from US56c to above US68c, a rise of 21%. Australia’s strongest wine export markets are the UK and US.
Wine producers, among other manufacturing exporters, are increasingly focused on the psychologically important US70c barrier. The Australian currency is currently trading at US68.09c.
