Yellow Tail makers in crisis talks with lender

15th January, 2013 by Lucy Shaw

Casella Wines, makers of Yellow Tail – the best selling Australian wine in America – is in crisis talks with its lender after recording its first loss in 20 years.

Yellow Tail

According to the Wall Street Journal, Casella is looking to secure a deal with lender National Australia Bank ahead of an extended 30 January deadline.

A failure to secure a new loan could force the company to sell off vineyards and other assets, the company’s chief executive John Casella told the WSJ.

Casella reported a loss of AU$30 million in the last financial year, down from a $43.5m profit the year before, according to The Australian Financial Review.

“It is very, very tough. Provided we have the support of our financiers, we can make little or no money for a year or two,” Casella told the AFR.

Yellow Tail is in trouble over the soaring Australian dollar, which has strengthened by 13% against the US dollar in the past three years, according to Bloomberg.

Three quarters of Yellow Tail sales come from the US, but the strength of the Australian dollar against the US dollar has made its wines less competitive against those from the Napa Valley, Chile, Argentina and Europe.

Sales are not a problem for the brand, it just isn’t profitable anymore in the US.

“There is no volume issue, it’s all about the exchange rate. The currency is having serious implications for a lot of Australian manufacturers,” Casella told the WSJ.

Rather than raising prices to combat the problem, Casella is looking to introduce a range of premium wines from a new vineyard in the Barossa Valley and through a beer partnership with Coca-Cola Amatil Ltd.

Known for its distinctive kangaroo logo, competitive pricing and fruit forward style, Yellow Tail is the flagship brand produced by Casella, Australia’s largest family-owned winery, which also owns the Yendah and Mallee Point brands.

The world’s fourth-largest wine exporter, Australian volume exports rose in 2012, with exports of bulk wine overtaking bottled wine exports for the first time.

The growth of entry-level bulk wine meant the value of Australian wine exports fell 2% last year to AU$1.85 billion in a sixth consecutive year of value losses.

One Response to “Yellow Tail makers in crisis talks with lender”

  1. Yellow Tail -????

    surely you mean [yellow tail] – Its so simple – all lower case, space in the middle and square brackets with no other spaces. How would you feel if they got your brand name wrong?

    you don’t see people writing DriNk5-BuSiNe$S………..

Leave a Reply

Your email address will not be published. Required fields are marked *

Subscribe to our newsletters

Job vacancies

Wine Buyer

Conviviality Plc
Crewe, UK

Sales Account Manager - On-Trade

Berkmann Wine Cellars
Liverpool

Sales Account Manager - On-Trade

Berkmann Wine Cellars
M3/M4 corridor

Media Sales Manager - Hong Kong

The Drinks Business Hong Kong
Hong Kong

Regional Account Manager

New Generation McKinley
London, UK

Experienced Sales Account Manager – On Trade

Cantina Goccia
London and the south, UK

National Sales Manager – Premium Drinks

Core Recruitment
London based with national travel

Wine Trainee

Stone, Vine & Sun
Twyford, near Winchester, Hampshire

Senior Technologist - Drinks

Conviviality Group
London, UK

Procurement Manager

JF Hillebrand Global Beverage Logistics
Essex, UK

Porter & Laker Manager

Porter & Laker
Essex, UK

Sales Manager & Brand Ambassador - Southwest

Salcombe Distilling Co.
Southwest of England - reporting to Salcombe HQ, GB

Head of Marketing

ATOM Supplies
Tunbridge Wells, Kent, UK

The Global Merlot Masters 2017

Deadline : 24th February 2017

The Prosecco Masters 2017

Deadline : 10th March 2017

db Awards 2017

Deadline : 28th April 2017

The Global Organic Masters 2017

Deadline : 3rd March 2017

Click to view more

The Global Sparkling Masters

the drinks business is thrilled to announce the launch of The Global Sparkling Masters

The Global Rosé Masters 2016

the drinks business is proud to announce the launch of the Global Rosé Masters 2016.

The Prosecco Masters 2016

Now in its third year, the competition will reflect the growth in popularity of this fresh and exciting sparkling wine from the picturesque regions of Veneto and Friuli.

The Global Pinot Noir Masters 2016

After the success of last year’s competition that judged over 250 wines from no less than 16 countries, the drinks business is proud to announce the third year of the Global Pinot Noir Masters

Click to view more