Australian wine group Southcorp has raised prices for many of its premium brands reversing its controversial aggressive promotional spending and discounting.
The discounting, with the consequent shaved profit margins, was said to be a major factor in the four profit downgrades over two years, which resulted in the axing of chief executive Keith Lambert. Ironically the price rises were in the pipeline before Lambert’s departure was announced.
Prices rises of between 3% and 12% cover 28 leading labels of Penfolds, Lindemans, Seppelt and the smaller Coldstream Hills.
The announced increases came as Southcorp’s share price continued to strengthen on persistent speculation that the company could be a takeover target, with Australian rival Foster’s and UK giants Diageo and Allied Domecq as contenders.
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By GlobalData
