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Spending up as Casella grows in SA

By Meredith Booth SA Business Journal, The Advertiser, Tuesday 10 March 2009

Griffith-based wine company Casella Wines has increased its spending in South Australia, despite slowing growth of US sales for its Yellow Tail brand.

Casella spent almost $117m on wine and grape purchases, goods, transport and employment in SA last financial year. That was up from $95m a year average spent by the firm in the past four years.

Managing director John Casella expected the company from New South Wales’ Riverina region, would book a 2007–08 annual profit in line with the previous year.

ASIC accounts show profit climbed 2% to $65.25m in 2006–07 from the previous year, based on 6% higher revenue of $367.5m.

While major reviews at larger companies Foster’s Group and Australian Vintage have stripped millions from the value of their wine businesses, Casella Wines is optimistic its value brand will attract more drinkers.

US sales of Yellow Tail rose 400,000 cases, or 7%, in the year. While healthy, the growth pace has slowed from the more than 10% rise every year since 2001.

About 80% of Casella’s SA grape intake would be sourced from its long-term contract growers’ cooler regions Langhorne Creek, Barossa, Coonawarra, Clare and McLaren Vale.

Casella owns two vineyards in the Adelaide Hills and jointly owns 300ac in Wrattonbully with its US importer, WJ Deutsch and Sons.

As part of the SA spend Casella bought 100m bottles, half of Amcor Glass initial output from its Gawler bottle plant.

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