John Casella, managing director of Casella Wines, has hit out at reports the company is dying, ahead of its meetings with bankers today.
Casella Wines, owners of the iconic Yellow Tail label, recently reported its first loss in 20 years, recording a negative result of $29,893,434 for 2011-2012.
The company has dismissed reports that it is in trouble. It is currently in breach of its loan covenant with National Australia Bank.
''The thing about these stories is they are blown out of proportion. We are trading solidly, we are not late paying one creditor, everything is fine renewing these facilities,'' Casella told Fairfax Media.
''We are doing our best and engaged with our bank to have a [loan] facility in place not just for one year but for many years to come so we can operate in comfort,'' said Casella.
The persistently high Australian dollar has hurt earnings in the United States, where three quarters of Yellow Tail sales are made. Casella has refused to increase prices in response to the strong Australian dollar, citing the risk to its market share.
'”Our sales volume remains solid and is only down 0.2 per cent in the US,” said the managing director.
“We don't have a sales problem, we have a margin problem created by a huge movement in the currency, which is now 50 per cent above the historical average.'