Casella Family Brands Managing Director John Casella is predicting a wave of distressed sales over the next 12 months as the Australian grape glut deepens.

However, he told the Australian Financial Review Casella Family Brands will not be looking at buyouts or selling any of its brands.

It’s the second time this month Casella has hosed down talk of an acquisition spree. Earlier this month he dismissed rumours the company had looked at buying Jacob’s Creek from Pernod Ricard.

“We’ve got premium, we’ve got super-premium, we’ve got everyday, value wines,” he told The Australian.

“There’s no value in just complicating our portfolio. It’s a matter of keeping it as clean and as relevant as possible.’’

Rabobank has foreshadowed two tough years ahead for the industry and noted that not even the removal of Chinese anti-dumping tariffs would be enough to prevent Australia’s wine industry facing several years of oversupply.

Riverland wine growers have called for a moratorium on planting vines in a bid to solve the crisis, with experts predicting millions of vines will need to be destroyed.

Among the first victims of the glut is Salena Estate Wines, which announced in February that it was entering voluntary administration.

“I think without a doubt, there needs to be a shake-up and a shakeout,” Casella told the AFR.

Casella is known for producing iconic Australian wines ranging from [yellow tail] to Peter Lehmann Wines, Brand’s Laira of Coonawarra, Baileys of Glenrowan and Morris of Rutherglen.

During the early months of lockdowns amid the pandemic, [yellow tail] annual sales were as high as 14 million cases annually. However, Casella said the brand’s sales dropped off in line with the wider contraction in the sub-$10 per bottle segment globally.

According to IWSR premiumisation in wine is continuing, but showing signs of slowing, with Champagne and premium-plus sparkling and still wine in volume decline in the first half of 2023. The standard-and-below wine market, however, is declining faster, which means that overall premium-and-above wine continues to gain share.

The trend has led Treasury Wine Estates to conduct a review of its business, with the potential to demerge its premium brands from its cheaper ones, or possibly sell off its sub-$30 brands.

“We’ve been affected by the receding tide,” Casella said.

However, he said Casella Family Brands was on track to generate annual sales of between $420 million to $450 million for the 12 months ending 30 June 2024. Net profit after tax for the company in 2022-23 was $25 million and sales revenue was $460 million. 

Casella switches on largest solar facility in the Australian beverage industry

Casella is continuing to invest in its drinks business and has switched on the largest solar power facility in the Australian beverage sector.

The $10 million facility will provide clean, renewable electricity to the company’s largest production site in Yenda, NSW, which is home to [yellow tail] wine. Through a staggering 8730 solar panels, it is capable of generating 11.53 GWh of clean electricity per year. This will offset 7800 tonnes of greenhouse gas emissions, which is enough to meet the electricity needs of approximately 1900 Australian homes, or equivalent to planting 325,000 trees.

It’s not just the winery that will benefit from solar power, the facility will also power Casella Family Brands’ on-site brewery, home of the Australian Beer Company and its brands including Yenda Brewing Co., Son of a Nun and Pressman’s Cider.

Casella said; “I’m extremely proud to unveil our investment in clean electricity through our two new solar systems. As well as reducing our footprint, we are making a direct contribution to the Australian wine industry’s GHG emissions reduction goals via the products we make and supply, as we all strive to ensure a sustainable global wine sector.

“As a family-owned business, we’re committed to playing a role in ensuring the resilience of the Australian wine industry for generations to come. This includes investing in the regions where we operate, supporting our growers during challenging market conditions and making strategic decisions to ensure our business is set up for long-term success.”