An influential US wine critic has a sobering message for Casella Wines: Americans just ain't into Yellow Tail any more.
Casella breached its debt covenants after reporting its first loss in 20 years, which it has blamed on a high dollar wiping out profit in its biggest market, the US.
The Yenda-based winery is in a fresh round of talks with its bank, National Australia Bank, which set a January 30 deadline for Casella to decide on cost cuts and a fresh strategy to grow wine sales again.
Lisa Perrotti-Brown, a wine critic for Robert Parker's US-based Wine Advocate, said Casella's problems in the US, where it generates three quarters of its sales, were much deeper than the dollar, which is worth about $US1.05.
"Yellow Tail was a great introduction to Australian wines for Americans, but they've moved on," Ms Perrotti-Brown said.
"It's unrealistic to expect entry-level wine customers to remain loyal to one wine brand, label, flavour for too long, particularly considering how much wine choice and competition there is out there."
Singapore-based Ms Perrotti-Brown is Wine Advocate's editor-in-chief and reviews Australian and New Zealand wines for the consumer wine guide.
Casella says Yellow Tail sales in the US slipped only 1 per cent in 2012 compared with double-digit falls for other producers.
This suggests Americans are still drinking plenty of Yellow Tail about 8 million cases. Managing director John Casella argues he doesn't have a volume problem, he has a profit margin problem.
One veteran winery owner, who declined to be named, said Casella was exposed to potential grape price rises following two below average vintages and less supply.
The winery owner estimated that cheap wines were more than half the nation's production, which was "only marginal if it is at all profitable".
Casella doesn't want to lift prices for fear of losing market share in the US.
Instead, the company is maintaining its position in the US, albeit a lossmaking one, while lifting production of premium wines to markets such as China.