Importers, such as Melbourne’s Boccaccio Cellars, are hit hard by the Aussie’s plunge in value against the euro and the $US over the past year.
The wine, beer and cheese that Anthony D’Anna imports from Italy gets sold everywhere from his family’s store in suburban Melbourne to Bondi Beach’s famous Icebergs and Rockpool Bar & Grill in Perth.
It’s less of a problem at the high end. Wine from Gianfranco Soldera in Tuscany, which retails here for $1200 a bottle, would be lapped up at triple that price, he says.“When the dollar slips below €0.60, it makes life really difficult, and we have to pause or limit how much we import, and we can’t ramp it up again until it returns, with €0.65 being the sweet spot in terms of costing.”
It has now shed 11 per cent of its value against its US counterpart since mid-July, as the RBA’s cash rate is significantly below that of comparable central bank rates overseas; for example,Australia’s 4.1 per cent cash rate is also 40 basis points lower than the European Central Bank’s key lending rate, Mr Oliver says.
“So overall, a big chunk of the weakness against the euro is the deteriorating interest differential, with another chunk being China and risk-off sentiment among investors,” Mr Oliver said.
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