Australian Vintage says strong supermarket own-label sales and a focus on premium branded wines "at the right price point" have helped it return to profitability.

The McGuigan and own-label supplier said profits for the six months to December 2009 reached £5m up £12.2m against the same period in 2008.

The company's UK promotional strategy had focused on higher-margin own-label and branded wines, said CEO Dane Hudson.

He added that success in wine awards which included McGuigan winning the International Wine and Spirits competition had boosted retailer confidence in the company's premium credentials.

"Our branded growth has been driven by a focus on making and marketing high-quality wines at the right price point," said Hudson. However, he added that an oversupply of wine and a high Australian dollar continued to make trading difficult.

Merger discussions with fellow Australian wine supplier Constellation were continuing, said Australian Vintage.

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