Taylors poised for growth as dollar backs export lift
Clare Valley winemaker Taylors Wines has ridden the wave of a weakening Australian dollar and improving conditions in Europe to increase its full-year sales by 11 per cent, and is hoping a shortage of quality grapes in France will nudge buyers towards its doors.
Taylors managing director Mitchell Taylor said there were growing fears among key distributors that iconic regions such as Bordeaux and Burgundy would face significant supply constraints heading into the next vintage, generating opportunities for the South Australian family-owned winery to put its label in the hands of buyers looking for premium blends to cover the expected shortfall.
Mr Taylor, who is also chairman of Australia's First Families of Wine, a club of 12 multi-generational family-owned wineries, said China was still showing signs of consumer restraint in the wake of austerity measures but that there was hope that celebrations around the Chinese new year in early 2014 would trigger fresh orders.
Taylors, which was founded in 1969, posted revenue of $54.08 million for fiscal 2013, up from $48.77 million in 2012.
The 11 per cent bounce in revenue came because most winemakers have experienced tough trading conditions at home and abroad, thanks to a strong Australian dollar, recessionary conditions across major export markets and intense competition on Australian retail shelves from cheap imports.
But Mr Taylor said the falling Australian dollar had helped boost the company's competitiveness, and fuelled a revival of some of its key export accounts which had fallen silent when the Aussie dollar was trading well above parity to the US dollar.
"We have had great momentum with a few new accounts [and] we have had some of our export customers come back with increasing sales, and exports are starting to turn," Mr Taylor said.
"Europe is getting better, in North America only really Canada is doing better, but Europe has been growing and particularly the UK and we have also some solid steady increases in New Zealand."
Mr Taylor said price points between $18 and $30 a bottle, which covers Taylors' premium wines such as its Jaraman series, had been selling well, with supermarket customers asking for more stock.
"At home we have had solid growth, trading conditions are still tough, but we are finding we are getting good support from both supermarkets - Coles is coming back and rejuvenating themselves - and also good results from independent supermarkets."
For the 2013 financial year Taylors' full-year profit slid from $4 million to $670,000, but Mr Taylor said this was mainly the result of the company being forced to devalue its grapevine asset and latest harvest in its accounts in keeping with the complex, and sometimes downright illogical, accounting standards that winemakers must comply with.
Mr Taylor said recent poor growing conditions in France should tighten the availability of good-quality grapes, handing an advantage to Australian winemakers.
"They have had bad vintages in Burgundy, their third in a row; there have been frost and hailstorms."