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22/01/2015

Value of Australian wine exports rises

Australian wine imports recorded growth for the first time since the 2007 global recession, according to the latest Wine Export Approval Report released by the Australian Grape and Wine Authority (AGWA) yesterday. Total Australian wine export volume increased by 1.9 per cent to 700 million litres and total value increased by the same rate to $1.82 billion. Over the past year, Australian wine has been exported to 121 destinations by 1,329 exporters and in contrast to 2013, the majority recorded volume growth.

The increase in volume was aided to some degree by the depreciating Australian dollar but a huge Spanish crush in 2013 put downward pressure on bulk wine prices which continued to decline by two per cent to $0.99 per litre. Bulk wine export volumes however increased by eight per cent to 402 million litres.

In contrast, the average value of bottled wine exports grew seven per cent to $4.85 per litre, the highest it’s been in a decade and driven by both demand for Australia’s premium wines in North America, Europe, and much of Asia and a decline in bottled exports under five dollars per litre with more wine shipped in bulk containers to be bottled in-market.

Andreas Clark, AGWA’s acting chief executive, said the premium price segments saw the strongest growth throughout the year.

“It’s encouraging to see the value of Australian wine exports in positive growth for the first time since 2007 and increasing demand for our premium wines was a major contributing factor to that growth,” he said.

“We’ve seen rises in wine exports in all premium price segments: the $7.50-$9.99 price segment increased by five per cent to 15 million litres and by 15 per cent in the $10.00 and above segment to 17 million litres.”

Clarke said the ultra-premium above $50 segment grew 55 per cent, hitting a record $107m.

“While the segment only accounts for 0.8 per cent of the total volume, it contributes eight per cent of the total value of bottled export,” he said.

Wine exports in the above $10 were at $356 million, just below the record high of $371 million set in September 2007.

Key figures released in the report by market are as follows:

UK and Europe

The UK remains Australia’s biggest export market by volume dominated by bulk wine exports that are destined for Europe. Total volume increased by 4.5 per cent to 249 million litres.

In 2014, Australian wine exports to Europe increased by four per cent to 361 million litres valued at A$581 million. This increase was driven by bulk wine exports, up eight per cent to 294 million litres, while bottled wine exports declined by 11 per cent to 67 million litres.

Despite this decline, the average value of bottled wine exports increased by six per cent to $4.25 per litre.

United States

Two consecutive record domestic harvests have reduced the demand for imported wine in the US. Total Australian wine exports declined by nine per cent to 164 million litres valued at A$423 million. The decline in exports was mostly seen in the lower price segments, a reflection of the large US harvests.

Bulk wine exports declined by nine per cent to 54 million litres and bottled wine exports under $2.50 per litre declined by 79 per cent to 3.1 million litres.

However growth continued in the higher priced segments for the third consecutive year. The US emergence from recession and more buoyant stock markets mean wine consumers may have greater purchasing power to spend more on premium wines, a category that was hit hard during the recession. Exports above $10 per litre increased by three per cent to 1.6 million litres while exports in the A$7.50-$10 segment also increased by three per cent to 2.6 million litres.

Canada
With a relatively small domestic wine industry, Canada relies heavily on imported wines and Australia was a major source of bulk wine for the market increasing by 48 per cent to 31 million litres during 2014.

However the average value of Australian bulk wine declined by eight per cent to A$0.82 per litre, likely to be the result of price competition with European and US producers.

Bottle exports weakened down three per cent to 30 million litres but average value rose by two per cent to $5.22 per litres.

Asia

The austerity measures introduced by the Chinese Government in late 2012 had the biggest impact on the Chinese imported wine market over the last two years. In 2014 however, total Australian wine exports increased by eight per cent to 40 million litres valued at A$224 million. In volume terms, bottled exports have almost recovered to the levels recorded before the full effects of the austerity measures took hold.

The $2.50-$5 segment was the key driver of the turnaround increasing 15 per cent to 20 million litres.

More than 90 per cent of Australia’s ultra-premium wine exports (above $50 per litre) were exported to Asia and total exports to Asia (excluding China) increased by seven per cent to 36 million litres valued at $299 million.

Average value of exports to Hong Kong grew 43 per cent to $14.57 per litre and exports in the ultra-premium segment grew 127 per cent to $52 million.

Exports to Singapore rose 37 per cent to $59 million and exports in the ultra-premium segment grew 123 per cent to $12 million. Malaysia also performed strongly up 33 per cent to $35 million with exports in the ultra-premium segment rising 60 per cent to $10 million.

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