De Bortoli Wines has kept prices for its wines static despite rising costs amid fierce competition

The company, which recently launched a wine with pop star Kylie Minogue, has kept its wine prices static despite inflationary pressures as it tries to be competitive.

Darren De Bortoli has kept his wine prices static despite soaring inflation to remain competitive on the shelf.

Darren De Bortoli, the head of one of Australia’s largest family-owned winemakers, has always been unorthodox in the way he runs his winery.

He’s invested millions of dollars on the sharemarket to reap non-wine returns – and now he says he won’t be raising wine prices, despite with soaring costs.

While most other winemakers have increased bottle prices to counter the rise in staff, energy, transport and packaging expenses, Mr De Bortoli’s winery has mostly kept its prices static to wear some of the profit pain but remain competitive on the shelf.

“We have tried to hold prices in current market conditions, it does hit profits though. It helps us be more competitive in the market,” Mr De Bortoli said.

Latest results lodged with the corporate regulator show De Bortoli Wines, based in the Riverina region of NSW with vineyards in Victoria’s Yarra Valley, posted a slight lift in revenue for fiscal 2022 to $149.8m from $146.6m, although it swung to a loss of $4.1m against a profit of $15.8m in 2021.

The sharp swing to a loss for the year was not reflective of the winery operations, Mr De Bortoli said, but rather was driven by the fall in the sharemarket for the year.

The accounts show that investment income from playing the sharemarket added $14.79m to De Bortoli’s profit and loss statement in 2021, but this had dried up to only $980,000 in 2022 as global sharemarkets weakened significantly.

Mr De Bortoli, whose family winery was founded by Vittorio and Giuseppina De Bortoli in 1928, is known as a maverick within the industry not just for his views on the sector but for also deploys the family wealth into equities.

In 2013, De Bortoli Wines slumped to a $24.7m annual loss after the value of its equities investment portfolio sank by nearly $50m.

Kylie Minogue has celebrated her first Victorian chardonnay wine release, with De Bortoli Wines, in the Yarra Valley. Picture: Michelle Tran

As for its wine business in 2022, Mr De Bortoli said its King Valley prosecco and its Rosé Rosé brand had shown exponential growth year-on-year with 11.2 per cent and 26.24 per cent growth respectively. The launch of its new Blue Pinot Gris in May 2021 had generated $1m of sales in its first year, he added.

De Bortoli has also launched a range of wines in partnership with pop star Kylie Minogue that includes a Yarra Valley pinot that has won a number of wine awards.

“Although De Bortoli faced many challenges over the last few years both internationally and domestically, the market is beginning to recover,” Mr De Bortoli said in his directors report accompanying the financial results. “The on premise channels have opened and are slowly returning to full occupancy, the tourism and travel industries have started to pick up with consumers feeling more confident to get out of their homes.

“Even though the worst days of the pandemic are behind us, we were still impacted by supply chain issues from sourcing to international transport issues.”

According to the report, De Bortoli’s biggest market is Australia with sales of $130.8m, up slightly from $127m in 2021, followed by Asia Pacific which was up strongly to $7.9m in sales from $5.5m in 2021 and Europe, down one third to $6.4m in sales.

Mr De Bortoli said it was tough for the wine industry at the moment given the economic headwinds as well as still being locked out of China because of crippling tariffs, but De Bortoli’s range was selling well across key markets.

“I think prosecco is very trendy at the moment, and our Rosé Rosé is a very appealing product in terms of its contents and the packaging. The feeling is the consumer trades down when times are tough, but I think that the consumer impact will be very specific.”

“The wealth effect of lowering house prices is also a worry and could impact wine sales.”

Originally published as De Bortoli Wines has kept prices for its wines static despite rising costs amid fierce competition