Red alert for Casella Wines

CASELLA Wines has recorded its second consecutive loss in its 20-year history as the company continues to battle pressures brought on by the high Australian dollar.

The winery posted a loss of $11.9 million for 2012-13, following on from a $30 million deficit the previous year.

Company director Joe Casella said with the recent drop in the exchange rate, business was well on track to return to the black.

“There is no reason why we shouldn’t be confident of a return to profitability this year,” Mr Casella said.

“The dollar was the main reason we were unprofitable and the dollar has come down a fair bit over the last four months, which is very positive.

“Sales haven’t dropped, if anything they have increased, it’s solely the exchange rate that’s been the problem.”

The Casellas refused to increase the cost of their product to offset overheads, hoping to endure the short-term pain without losing any market share. 

The Area News reported earlier this month that Casella Wines had kept its price offering for grapes in line with last year, paying growers more on average than Berton Vineyards, McWilliams Wines and Pernod Ricard Australia, previously known as Orlando Wines.

Mr Casella said keeping farmers going was vitally important to the business.

“It’s very important we maintain the best prices we can for growers because they need to be proitable enough to live,” he said.

“At the end of the day, if farmers can’t sustain a living then we lose our grapes, it’s that simple.”

Managing director John Casella said the winery’s foray into brewing had started slowly but was expected to pick up soon.

“The relationship with Coca Cola Amatil is great and things are starting to happen with the beers but we need to remember that we entered the market at the worst possible time,” John Casella said. 

“Despite launching the products over Christmas, the January and February period is the quietest of the year and we have been more than impressed with the result so far.”

John Casella said the current vintage had been slowed by repeated rain events but the quality of local grapes remained high.

“The quality of this vintage has been good and it’s a very early vintage so by the end of next week there will be very few local grapes left, which is very unusual,” he said.

“The rain slowed vintage down but thus far there haven’t been any material effects on the quality.” 

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