Global wine pricing has continued the declines seen in 2018, however Australia has bucked the trend with average prices remaining relatively stable, according to Rabobank’s latest global Wine Quarterly.

While global prices have come under pressure from the rebound in world production from the previous year, as well as a reduction in imports from China and slowing growth rates in the US, the report says Australian prices are above those of other major exporters.

With signs the Australian wine grape harvest will come in lower than expected, due to the impacts of the prolonged dry period in many producing regions, the report says current Australian prices levels are also being supported by the sustained interest in Australian wines.

Meanwhile grape volumes for the 2019 harvest look to be coming in lower than initially anticipated in Chile, South Africa and New Zealand although supply remains abundant in Argentina.

This situation, according to the report, is seeing the market become more heterogeneous with scarcity affecting specific products and qualities. “International prices for Argentinean wine are still declining while expectations of a smaller crop in Chile are triggering some price increases for varietal prices for the country. And in Europe, prices for generic whites from Italy remain soft while organic and similar wines are highly sought after,” the Wine Quarterly says.

Meanwhile, from a sustainability perspective, the report says, the “wine industry is clearly ahead of the curve in terms of seeking solutions to climate change” but cites the importance of understanding the carbon footprint of wine across the supply chain – which continues to gain attention globally. This is particularly in regards to packaging, which accounts for a larger component of total greenhouse gas emissions for the wine sector than the vineyard. Shifting to lighter glass bottles could be a relatively easy way for wineries to reduce their carbon footprint, the report says, while cork closures could also help offset the carbon footprint of glass bottles.

For Australia

Demand remains firm, with Australian wine exports growing by five per cent in volume and 10 per cent in value during 2018. Bottled wine exports (which account for 42 per cent of total volume and 79 per cent of total value) were up by three per cent in volume and seven per cent in value, while bulk wine sales increased by 12 per cent in volume and 27 per cent in value.
Exports were up to Greater China (Australia’s largest market by value and second by volume) by seven per cent in volume and 18 per cent in value – with much of this increase occurring in the last quarter of 2018, as the market recovered from a weaker third quarter ahead of the Chinese New Year.
Meanwhile exports to the US (Australia’s second largest market by value and third by volume) were down by seven per cent in volume and five per cent in value, although this trend also improved towards the end of the year.

In 2018, Australian wine exports to its largest market by volume, the UK, increased by 10 per cent in volume terms (and 12 per cent in value) with bulk wine exports the key growth driver – up by some 27 per cent in value. High prices in Europe and continued inventory-building activity ahead of Brexit-related potential turbulences can’t be ruled out as relevant growth drivers, the report said.