Casella Family Brands Managing Director John Casella has addressed the pressures that led to the company posting a $5.5 million loss for FY25.

He told ABC News the results reflected the pressures currently facing the drinks industry.

“We’ve seen rising input costs across the supply chain, including raw materials, energy and freight, alongside higher interest rates, foreign exchange volatility and the impact of US tariffs, all of which have weighed on margins,” he said.

Casella said the company had battled with 10% tariffs in the US market and falling consumption of imported wine, which had led to its sales in the United States falling by almost 17%.

“This softness has been offset by growth across other key regions, including the UK, Europe, Asia, Canada and Australia, resulting in increased overall sales across our major markets,” he said.

Australian sales for Casella were $220.73 million and ahead of the US for the first time, with the latter only reaching $172.94 million.

The US is the wine giant’s biggest market for its iconic Yellow Tail brand. Known for being accessible, affordable, and featuring a kangaroo on the label, Yellow Tail is a top-selling brand in over 70 countries. 

The company also owns brands including Peter Lehmann, Brand’s Laira, Baileys of Glenrowan and Morris of Rutherglen.

It was the company’s first net loss in 13 years and a dramatic fall from recent accounts, which saw a profit of $18.6 million in 2024 and $26.5 million in 2023.

Financial reports lodged with the Australian Securities and Investments Commission (ASIC) show Casella Family Brands has also increased its debt by $170 million.

The report revealed the company was in breach of the fixed charges cover ratio in its debt covenant at June 30, but received a waiver from its bank in November.

Casella assured ABC News the business had a strong balance sheet and was well-positioned to navigate current conditions.

“Our message to grape suppliers and employees is that the business is financially stable and we remain confident in our future,” he said.