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2/08/2017

#V17 report: Upward trend in crush and price

The Australian wine sector recorded its third consecutive increase in crush and the average purchase price of winegrapes this year, according to the National Vintage Report 2017 released today by Australian Vignerons, Wine Australia and the Winemakers’ Federation of Australia.

In a continuing trend of positive increases for the Australian grape and wine sector, the national crush is estimated to be 1.93 million tonnes – an increase of five per cent from the 2016 vintage – and the national average purchase price increased by seven per cent $565 per tonne – the highest since 2008.

Wine Australia Chief Executive Officer Andreas Clark said the increases "reflect excellent seasonal conditions in many regions as well as the growing demand for Australian wine, both in export and domestic markets".

"Pleasingly, the figures from the National Vintage Report indicate that the supply and demand for Australian wine is in balance. An additional 93,000 tonnes were crushed this year, which produces approximately an additional 65 million litres of wine. This is in line with increased demand for Australian wine: in 2016–17, exports increased by 50 million litres, and domestic sales increased by 12 million litres in 2015–16, a total of 62 million litres," Clark said.

Australian Vignerons Chief Executive Officer Andrew Weeks said the third consecutive rise in the average purchase price of winegrapes was "a positive development for Australia’s winegrape growers".

Winemakers’ Federation of Australia Chief Executive Officer Tony Battaglene said there was a "cautious optimism being echoed across the Australian wine sector". 

THE CRUSH

In the 2017 vintage, most regions recorded an increase in tonnes crushed, with the growth in the national crush coming relatively equally from the cool/temperate and warmer inland wine regions of Australia.

The crush from cool/temperate regions increased by nine per cent to 0.61 million tonnes and accounted for 31% of the national tonnes. In warmer inland regions (Riverina, Murray Darling–Swan Hill and Riverland) the crush increased by three per cent to 1.32 million tonnes, making up 69% share of the national crush.

Red winegrape varieties increased their share of the crush to 55%, compared with 52% in 2016. Overall, red winegrape varieties increased by 12% and offset a slight decline of two per cent in the white variety crush.

The top ten winegrape varieties produced did not change in 2017, but Muscat Gordo Blanco has replaced Semillon in seventh spot. The top ten are: Shiraz, Chardonnay, Cabernet Sauvignon, Merlot, Sauvignon Blanc, Pinot Gris/Grigio, Muscat Gordo Blanco, Semillon, Colombard, and Pinot Noir.

Of the alternative varieties, production increased significantly for Dolcetto, Pinot Meunier, Montepulciano, Tarrango and Fiano.

WINEGRAPE PURCHASE VALUE

More than 35,000 transactions were collected for vintage analysis. They revealed that the average purchase price increased seven per cent from last year’s vintage to $565 per tonne – above the average price across the previous five years of $477 per tonne.

The average purchase price of red winegrapes increased by 6 per cent from $651 per tonne to $691 per tonne, and the average price of white winegrapes also increased by six per cent from $398 to $420 per tonne.

Average purchase price increased for all but two of the top ten winegrape varieties and there was an increase in the proportion of premium A and B grades purchased (e.g. $1500 and above per tonne) from 6.4%t to 7.4% this vintage.

An analysis of the dispersion of prices by variety indicates that 12% of reds were purchased at $1500 per tonne or above in 2017, while 71% were purchased at below $600 per tonne.

Shiraz was the biggest driver in the overall increase in the average purchase price as the share of Shiraz purchased at A and B grades increased from 13.3% in 2016 to 15.5% in 2017, which is double the proportion from five years ago.

The total estimated value of the Australian winegrape crush from the 2017 vintage is $1.22 billion, an incease of 13% from $1.08 billion in 2016.

The National Vintage Report 2017 can be downloaded here.

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WID 2017