Tahbilk has bottle for US expansion as dollar value falls
Tahbilk, whose brands include its flagship Tahbilk range, Four Sisters and McPherson, is on the cusp of a new supply deal for a major retail chain in the US. In the world's fastest-growing market, China, the group believes its portfolio of mid-price wines will be protected from the worst of the recent austerity drive, which has punctured once booming sales for more luxury beverage brands.
Better margin on its sales, a weaker dollar and the absence of an overhang of commercial bulk wine gathering dust at its warehouses has helped Tahbilk boost its fiscal 2013 full-year profit to $212,376, up from $51,168 in 2011-12. Revenue for the year to June 30 was slightly weaker, down to $10.98 million from $13.18 million.
Tahbilk chief executive Alister Purbrick said the smaller revenue for 2013 was primarily driven by the lack of excess bulk wine on its books that needed to be cleared through its sales channel.
"We had been struggling with excess bulk wine stocks, which we had to sell as best we can. Sometimes you have grape-grower contracts locked in when you don't need them," he said. "It's taken a few years to get that under control, but in 2012-13 we didn't have unprofitable bulk sales to be made - and this had a positive effect on our margin."
Mr Purbrick, whose family bought the vineyard and winemaker in 1925, said the falling Australian dollar had provided just enough impetus to reanimate the winemaker's expansion plans for the US.
"That weakening from $US1-$US1.05 to US90¢-95¢ might not sound much but has made a big difference to us - it has meant we have been able to get on the front foot in America again," he said.
"So we are starting to drive sales now, whereas we were in a holding pattern before because we couldn't make margin out of it. Now we can make a bit of profit out of it - and if it went down to US85¢ we'd be absolutely ecstatic."
The winemaker was about to sign a new supply deal for its McPherson brand with a major US retail chain.
Mr Purbrick said anti-extravagance policies in China, sparked by the new government, had not squeezed wine sales at the mid-priced bracket.
"Certainly from our perspective ... there hasn't really been a big or negative impact," he said. "I think it has hurt the French more."
Treasury Wine Estates, owners of Penfolds, recently warned that it had detected a slowdown in sales for premium and luxury wines in the face of austerity measures.
Paris-based Pernod Ricard, owner of Jacob's Creek, has also commented on the impact for its top-price beverages because of the new policies.
Mr Purbrick said it was Chinese drinkers aged 25-40 that were driving wine consumption in the nation as their tastes differed greatly from those of their parents. They were increasingly viewing wine as the beverage of choice for celebrations and social occasions.
Frequently Asked Questions about this Article…
Tahbilk is expanding its presence in the US market because the recent fall in the Australian dollar has made sales to the region profitable for the first time in years. This currency shift has provided the impetus to reactivate their export growth strategy.
Tahbilk is expanding its wine exports to the US market because the recent fall in the Australian dollar has made sales to the region profitable for the first time in years. This currency shift has provided the impetus to reactivate their export growth strategy.
The weaker Australian dollar has positively impacted Tahbilk's business strategy by making their exports to the US more profitable. This has allowed them to move from a holding pattern to actively driving sales in the US market.
The weaker Australian dollar has positively impacted Tahbilk's business by allowing them to make a profit from US sales, which was not possible when the dollar was stronger. This has enabled them to move from a holding pattern to actively driving sales in the US.
Tahbilk offers several brands, including its flagship Tahbilk range, Four Sisters, and McPherson.
Tahbilk's financial performance has improved, with their fiscal 2013 full-year profit increasing to $212,376 from $51,168 in 2011-12. This improvement is attributed to better margins, a weaker dollar, and the absence of excess bulk wine stocks.
Tahbilk's fiscal 2013 full-year profit increased significantly to $212,376, up from $51,168 in 2011-12, despite a slight decrease in revenue.
Tahbilk faced challenges with excess bulk wine stocks, which they had to sell at lower margins. This issue was compounded by grape-grower contracts that were locked in even when not needed. However, they have since managed to control this problem, positively affecting their margins.
Tahbilk faced challenges with excess bulk wine stocks, which they had to sell at less profitable rates. This issue was resolved by 2012-13, positively affecting their profit margins.
Tahbilk's new supply deal in the US is significant because it represents a major step in their expansion strategy. The deal with a major US retail chain for their McPherson brand is expected to boost their presence and sales in the US market.
Tahbilk's wine portfolio, particularly its mid-priced wines, is well-positioned in the Chinese market. The company believes these wines are protected from the negative impacts of recent austerity measures affecting luxury brands.
The Chinese market has not negatively impacted Tahbilk's wine sales, particularly in the mid-priced bracket. Despite anti-extravagance policies affecting luxury brands, Tahbilk's mid-priced wines have remained popular, driven by younger Chinese consumers aged 25-40.
According to Tahbilk, Chinese drinkers aged 25-40 are driving wine consumption in the nation. Their tastes differ from their parents, and they increasingly view wine as the beverage of choice for celebrations and social occasions.
According to Tahbilk, wine consumption in China is being driven by younger drinkers aged 25-40. This demographic views wine as the beverage of choice for celebrations and social occasions, differing from the preferences of their parents.
Anti-extravagance policies in China have not significantly impacted Tahbilk's sales, particularly in the mid-priced wine bracket. The company believes these policies have affected luxury brands more.
Austerity measures in China have impacted the wine industry by slowing down sales of premium and luxury wines. However, Tahbilk's mid-priced wines have been less affected, as they cater to a different market segment that remains robust.
Call 1300 880 160
Start a chat
Schedule a call
