Australian Vintage Reports 1.7% Sales Decline as Restructuring Costs Weigh on Earnings

Australian Vintage, the company behind the McGuigan wine brand, reported a 1.7% drop in sales for the six months ending December compared to the previous year. Despite the decline, the company maintained its net debt at AU$110 million, which matches its earlier guidance. The first half of the year saw one-off restructuring and marketing costs totaling AU$18 million, which kept earnings at break-even and AU$11 million lower than the same period last year.

The company stated that both cash and net debt levels remain within expected ranges. Australian Vintage expects a stronger performance in the second half of the year and projects neutral cash flow by year-end, excluding investments such as its recent acquisition of the MacFish brand.

Shares in Australian Vintage have dropped by 50% over the past year, falling from AU$0.16 to AU$0.08. This decline follows a challenging period for the company, including a failed merger with Accolade, now known as Vinarchy. In response, Australian Vintage has launched a turnaround plan focused on moving away from wines priced below AU$10 per bottle. The company is adapting to changing consumer preferences, as more drinkers choose lighter styles like white, rosé, and sparkling wines over traditional red wines.

To support its recovery, Australian Vintage is reducing stock levels by cutting supply contracts and is focusing on expanding its product range and distribution network. The company is also investing in innovation and acquisitions. A key part of this strategy is Poco Vino, a small ready-to-drink wine format that currently sells 12,000 units daily and is expected to generate an additional AU$15 million in annual sales if current trends continue.

Another product showing strong growth is Lemsecco spritz, which has seen sales triple compared to last year’s figures shortly after its launch. The company reports that this product has gained significant momentum in the market.

In the United Kingdom, Australian Vintage says it is performing in line with overall demand for Australian wines. The company is leveraging its sponsorship with the English Cricket Board to promote McGuigan wines and has expanded its UK portfolio with Mad Fish, targeting higher price points and white varietals.

Australian Vintage’s management remains focused on innovation and premiumization as key drivers for future growth. The company believes these efforts will help it achieve a stronger financial position in the second half of the year despite ongoing challenges in global wine markets.