TW: Some folks get very uptight about a weakening dollar. There are many variables which impact exchange rates. But below frames what happens when our currency declines relative to in this case the Aussie dollar. All that formerly cheap Aussie wine becomes not so cheap meaning they either stop sending it here or they figure out how to shift some of the product cost (in this case bottling) to the U.S. And voila suddenly our imports slow a bit as American start bottling the Aussie bulk wine or perhaps American buy domestic wine.
Americans drink a bunch of international alcoholic beverages (wine, beer, Scotch etc.). This will change rapidly where ready substitutes exist (many with wine and beer, not so much with Scotch).
From Wine & Spirits Daily:
"CASELLA CONSIDERS BOTTLING YELLOW TAIL IN THE US
The Australian dollar is getting stronger much to the detriment of Australian wine producers such as Casella Wines who export their labels to the US. According to an article in Bloomberg, Casella, who produces Yellow Tail, is considering shipping its wine in bulk and bottling it in the US.
"Casella Wines, maker of the top-selling Australian wine in the U.S., is considering building a U.S. bottling plant and shipping its Yellow Tail across the Pacific in bulk as the Aussie approaches 95 cents," said the article.
They also quote managing direct John Casella as saying: "That is about 30 percent higher than the average and there isn't a 30 percent net margin in what you sell."
Other Australian producers are either halting shipments to the US or pulling up vines "because they can't compete on price."
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