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Australian Vintage
Neil McGuigan
April 2013 – Issue 591
Australian Vintage counts the UK as its biggest export market − and there’s no doubt the high Australian dollar is making life tough there. The company cited a fragile British market as it posted a slight drop in net profit to $3.3m for the six months ended December 31. It concluded: “It will be challenging to profitably grow the UK market based on current conditions.” Even so, chief executive Neil McGuigan still sees plenty of potential upside in the UK and Europe, where it has a long way to go before achieving full market coverage. He also sees scope for success – and decent margins − with lower alcohol wine. “What’s on the market at 5.5% is not good enough. We think we can get a very good 5.5% product in the UK and
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we’re going to release something this year.” McGuigan says the company is “really doing a job on China and Asia”, having long ago identified the importance of those regions. And then there are established markets where the wine is still seen to offer good value. Canada, AV’s fifth-largest export customer, is one example. “Canadians love our wine. We think there’s a huge opportunity for our brand there.” McGuigan sees a need to grow in Australia, as a means of hedging against the vagaries of the exchange rate. The company has also trimmed costs, renegotiating long-term grape contracts in Sunraysia and Griffith and working to ensure its production footprint is appropriate to its sales.
The Australian & New Zealand Grapegrower & Winemaker 27