FLOODING in March cost Riverina winemaker Casella Wines more than $2.6 million and contributed to its first loss in 18 years.In financial reports lodged with ASIC last month, Casella Wines advised a loss of $29.89 million after tax for 2011-12.
Casella Wines managing director John Casella said it was ''an accounting loss, not a total loss'', the company's balance sheet remained solid and there would be no cutbacks.
Staff managed to keep the Yenda winery site dry during the March floods by building a huge earthen bund wall, but it was closed for a week.
''The biggest cost was contract processing,'' Mr Casella said.
''We were processing at 22 different sites in order to keep the volume going and not hold up growers who were mid-harvest.''
The company also lost a significant quantity of dry goods and packaged wine stored at the former McWilliams Yenda site which was inundated.
As well as the cost of flood recovery, the loss was exacerbated by loan writedowns ''to related and outside parties'' of $29.79 million.
The overall result is being blamed on the Australian dollar which has squeezed margins on the exports that make up 95 per cent of Casella sales.
''History will show this dollar will leave a trail of business wrecks,'' Mr Casella told Griffith newspaper, The Area News.
''I don't believe the currency can stay where it is. But we will have to make hard decisions if the currency doesn't balance out.''
Mr Casella has already spoken of plans for a new premium range of wines next year to satisfy a growing demand for luxury wines.
But price rises for other products from Australia's largest family-owned winery might also be on the cards.
Mr Casella told The Weekly Times it was ''business as usual'' for staff and the company's 400 grape grower suppliers, and the company again expected to crush about 170,000 tonnes of grapes in the coming vintage.
Casella Wine labels include the [yellow tail], Yendah, and Mallee Point ranges, as well as the boutique beer, Arvo, which was launched in June.