Wine company Australian Vintage Limited (AVG) says wine exports across its markets declined in FY23 as tough trading conditions impacted sales growth.
For the year to June 30, the business – whose brands include Nepenthe, Tempus Two and McGuigan – said revenue reached $285.6 million, in line with the prior year with underlying tax-paid profit reaching $4.2 million and EBITDAS of $26.1 million.
By segment, the UK/Europe market contributed 49 per cent to total revenue and remained a significant focus for AVG due to the introduction of the UK duties tax this month. Retailers will pay lower duties on wines with a lower alcohol by volume – a category in which AVG is strong.
Meanwhile, the Australian market has seen an overall value segment reduction post covid, reinforcing the importance of premiumisation and innovation.
In Asia, the company expects continued growth in the core markets of Taiwan, Hong Kong, Japan, Malaysia and Singapore along with an improved product range.
Meanwhile, this financial year also presented one of the “toughest external operating environments” in decades for the business with the value of wine exports from Australia declining by 10 per cent and Europe and North America recording declines of 15 per cent and 14 per cent respectively.
Likewise, inflationary pressures in the UK and China tariffs resulted in a profound impact on the sale of Australian wine.
AVG CEO Craig Gavin said the company’s strategic plan is working and added: “The relentless pursuit to drive our pillar brands, innovate and expand geographically has shored up our platform for future growth.
“The financial year saw us absorb significant inflationary costs and realign our business to be a lower-cost producer. This sets us up well for FY24 and beyond.”
The company says the Middle East and India represent a significant business opportunity whereas combined with China reopening, the rest of Asia offers double-digit growth and a “strong innovation pipeline” for the future.
