The wires have been buzzing with information about Yellow Tail, the single largest imported wine brand into the US market, some of which is correct, some way out. Yellow Tail, which according to recent AC Nielsen figures has increased its stake to represent 27.5% of all Australian wine sold in the US, is indeed to be subject to a price correction that takes into account the strong and unexpected growth of the Australian dollar against its US counterpart. Contrary to much of what has been reported, the wines subject to the price rise will not reach the US until December this year, and in most cases will not reach US retail shelves until March 2004, when they will be noticed by consumers for the first time. ‘Nobody can sustain a 20% cut in margin’, John Casella (chief executive of Casella Wines, Yellow Tail’s owner) said this morning. ‘We might have been able to carry a 5% variation, but not 20%. If we hold off, we’re only costing ourselves more money. As the market leader in the US I thought it would be in the interests of the industry to let people know in advance what we were planning, but I have honestly been astounded by the response to our announcement.’ This news coincides with the announcement that after successful test marketing, Yellow Tail will be introduced to the Australian market. This move has largely been the result of popular demand, and Casella’s expectations are modest. Given these expectations and the extraordinary extent of its presence in the US, the introduction of Yellow Tail to Australia has absolutely nothing to do with published speculation that the strengthening Australian dollar ‘forced’ Casella to ‘look at building a market in Australia’.
