Hail, baron of the Barossa
Peter Lehmann, 78, Barossa valley wine legend, is celebrating the remarkable turnaround of the company that bears his name, following the news of its best-ever financial result.
On 3 September 2008 Peter Lehmann Wines (PLW) reported its full year results for the year ended 30 June 2008. PLW achieved an after tax profit of AUD 9.6 million on revenue of AUD 61.9 million compared with an after tax profit of AUD 5.7 million and revenue of AUD 63.5 million for the prior year.
The result has been particularly pleasing to PLW as the company has been steadily building momentum since the major expansion of the winery facility in 2002/03 and the Hess Group’s takeover in 2003/04. In its statement, PLW said that they were indebted to Swiss based Chairman Dr Max Lienhard who has been instrumental in ensuring the successful inclusion of PLW into the Hess Group of wine companies.
Over the past year, trading conditions in the domestic market remained as competitive as ever complains PLW. Despite predictions that the much smaller 2007 vintage would reduce the oversupply imbalance, this was not significantly reflected in the market. While companies were able to implement small price increases, the reality was that there were still abundant supplies of wine available, a problem that has been further exacerbated by the larger-than-estimated 2008 vintage.
PLW sales volumes were in line with that for the previous year, with revenue up 4 percent. These difficult trading conditions are expected to continue over the
next few years. PLW total export sales of branded wine were strong with volume increasing by 11 percent over that of the previous year. Global market conditions also remain very competitive and year on year the cost of doing business continues to increase.
The Barossa Grape & Wine Association says that oversupply remains the biggest threat to the reputation and sustainability of Australia’s wine industry. The restructuring by major wine groups and the distortion occasioned by large-scale vineyard plantings, driven by tax incentives (the so-called Managed Investment Schemes or MIS), demonstrate the critical need for cautious planning. The association will make a submission to the Federal inquiry into the benefits of non-forestry MIS.
