By Amy Looker
Australian Vintage Limited (AVL), owner of the McGuigan, Nepenthe and Tempus Two wine brands, expects its profits to be down this year on the back of a smaller 2012 vintage.
However, the wine producer’s CEO Neil McGuigan, says that fruit quality across the vintage is of excellent quality and the lower yields will help to bring wine stock back into balance following years of oversupply.
“Overall, the quality is outstanding and despite the lower than expected yields we are confident we can meet our demand requirements,” McGuigan said.
“With the lower yield, our self-generating and regenerating assets income from our owned vineyards is expected to be significantly down.
“But the pleasing aspect of our business is that our wine stock continues to be in balance with our needs, and the smaller than expected 2012 vintage will ease the pressure of oversupply from past years.”
McGuigan said that while the company continued to achieve significant success on the international show circuit, it was experiencing increasing pressure on export margins due to high exchange rates.
”McGuigan branded sales continue to grow in the UK and Europe, however, exchange rates continue to erode the benefits of these improved sales.”
McGuigan said that during the last year the company had moved more of its UK and Europe packaging requirement from Australia to the UK in a long-term bid to cut costs.
“We believe that our sales and marketing strategies are appropriate for each market segment and are confident that with time our consistent approach will pay dividends.”