Tough year for Aussie wine
Australian Vintage Ltd posted a $123.6 million annual loss after a tough year for Australian wine growers, saying the industry’s golden age has gone.
But the wine maker, marketer and vineyard manager says its sales rose during the year, bucking the industry trend, and it is in great shape for when conditions improve.
Australian Vintage, formerly McGuigan Simeon Wines, made a 2007/08 net profit of $1.344 million but struggled in 2008/09 due to problems with water availability and costs, falls in demand for Australian wines and a glut of grapes.
Chief executive Dane Hudson said the annual loss also came after a $127 million impairment charge following changes made after the company decided the traditional wine company model was not sustainable.
Controversy over new Bordeaux Premier Cru
According to a UK sales and marketing director with Bordeaux specialist Berry Bros & Rudd, a new Bordeaux Premier Cru category is nothing more than a sham to disguise quality issues in the region.
An application for a Bordeaux Premier Cru appellation has recently been lodged with the French appellation body, the INAO. It is proposed that the extra appellation will be placed above Bordeaux Superieur, to further differentiate its entry level wines.
However Simon Staples, sales and marketing director at Berry Bros & Rudd thinks that the idea of adding the new category which will inflate the price without any change in the vineyard is a cheat and will ultimately send customers in-the-know to buy cheaper wines from South America or Australia as better value wines.
US wine consumption still rising
According to statistics from the 2009 Wine Handbook (the leading source for US wine sales and consumption trends) US wine consumption rose 0.9 percent in 2008 to 294.7 million 9-litre cases. The newly released 2009 Wine Handbook, produced by The Beverage Information Group, detailed that although the growth rate has slowed slightly, this marks the fifteenth consecutive year of gains. However, because of the current recession, consumers have become more frugal with their purchases, more likely to purchase value-priced wines in both the on-and off-premise. Changing demographic trends cited in the 2009 Wine Handbook are favourable for the wine industry. The 70 million people that make up the ‘Millennial’ generation (age 21 to 30) are changing perceptions of wine. This generation is not as sophisticated about wine as preceding generations and is willing to experiment with wines at lower price points. Another factor accounting for the rise in US wine consumption is the weakened dollar which has driven up prices of imported wine selections. This has triggered an increase in sales among domestic vintages that are priced more competitively.