California wine company, Robert Mondavi, has reported a 24% drop in earnings for the second quarter as a result of slack demand for premium wines and its strategy of reducing wholesale inventories.

Net income stood at US$11.6m against US$15.2m last year. Sales for the quarter fell by 7% to US$131.1m.

Net income for the first six months fell from $26.6m to $19.8m, while net revenues for the first half-year were down by 10% to $212m, reflecting a 9% decrease in sales volume and a 1% decrease in net revenues per case.
Wholesale depletions were up by 3% and if sales of Vichon Mediterranean, a French brand which Mondavi has sold off, are stripped out, depletions were in effect up by 5%.
"We were encouraged by the quarter's results. In the travel and entertainment sectors, demand remained soft for ultra and luxury premium priced wines, but steady for popular and super premium wines," said Gregory M. Evans, president and CEO.