Two leaders in the wine market seem to be going in opposite directions these days. Yellow Tail, that most famous of all Australia “critter” wines has a currency problem. The Australian dollar has been rising against the US dollar, or more accurately, the US dollar has been sinking against the Australian dollar. The slide began in 2009 as the US economy continued its downward trend. This unbalance has caused Yellow Tail untold grief as reported in the Wall Street Journal, Caroline Henshaw reporting:
Australia’s largest family-owned winery relies on the U.S. for three-quarters of its sales, but the Australian dollar’s rise against the U.S. dollar has made its products less competitive against wines from rival regions such as California’s Napa Valley and South America.
Casella Wines is looking to shave costs and secure a deal with lender National Australia Bank ahead of an extended Jan. 30 deadline. A failure to secure a new loan could force the company to sell off vineyards or other assets, Chief Executive John Casella told The Wall Street Journal.
Meanwhile Charles Shaw or Two-buck Chuck, the Bronco Wines Co. low-price wine leader has raised its prices for the first time in its 11-year history. In New Mexico the wine is known as Three-buck Chuck as it is more costly everywhere but California. Up until now, that is. What would be the name recognition of Three-and-a-half-buck Chuck one wonders? Alison Mochizuki, spokeswoman for Trader Joe’s, as reported in the Los Angeles Business Journal had this to say:
“We’ve held a $1.99 retail price for 11 years. Quite a bit has happened during those years and the move to $2.49 allows us to offer the same quality that has made the wine famous the world over,” Mochizuki said.
Imagine, she actually used the word quality in her statement. Charles Shaw can still compete because its prices are about as low as one can find for a wine still considered "drinkable". Yellow Tail, however, now finds itself surrounded by same-price non-critter wines. This might be a good time for all fans to stock up on Yellow Tail, before it turns tail and runs off.
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