CELEBRATED McLaren Vale region wine group d'Arenberg has had its revenue and profit pruned by consumers switching to cheaper wines in the wake of the global economic slowdown.
D'Arenberg's general manager of sales and marketing, Ric Anderson, said selling wine at around $60 a bottle was ''getting tougher'' and the company had noticed drinkers trading down from its premium brands to its sub-$30 offerings.
''People are still drinking, but they are drinking slightly lower-priced wines,'' he said.
The family-owned d'Arenberg suffered a 7.75 per cent fall in sales to $23.57 million for the year to June 30, as group profit tumbled 51 per cent to $2.675 million.
Industry profits have evaporated in the face of the higher Australian dollar, as well as a chronic oversupply of grapes, which has helped to flood retailers with cheap wine.
A report prepared by the industry's four largest professional organisations estimates that the domestic industry is sitting on a stockpile of 100 million cases, a figure expected to double within a few years.
This week, BusinessDay reported that one of the country's biggest wineries, De Bortoli Wines, had dropped into the red with a loss of $1.6 million last financial year.
Mr Anderson said the strengthening Australian dollar was crimping exports.
''We do sell in Australian dollars to the vast majority of our markets around the world … and that is a situation where we are still trying to protect our retail price points and that, of course, is affecting our margin.
''We are hoping that the Australian dollar comes back to around 75 US cents sooner rather than later.''
