Australian Wine Exports

Wine Exports

The 2017–18 financial year saw Australian wine exports grow by 20% to $2.76 billion with an increase of 10% in volume to 852 million litres (Tables 4 and 5). Overall, an additional $451 million in revenue was generated by Australian wine exporters. This is a marked increase from the 2016-17 financial year indicating a second year of healthy rise for wine producers. The average value of exports grew by a sizeable 9% to $3.24 per litre free on board (FOB) – continuing the increasing trend for the second year running (Table 5).

Australia’s cheaper wine exports (below $10 per litre) accounted for 69% of the total exported wine and contributed more than 50% of the $451 million increase in the 2018 fiscal year (Table 4). The only decrease experienced was in the $15-$19.99 range which dropped by 12% equating to a $9.8 million dollar loss to the industry. However the news was good elsewhere with enormous growth in both lower- and higher-end price options. In particular the $20-$29.99 and $50-$99.99 categories soared by 87% and 86% respectively injecting an additional $180 million into the industry last year. Once again the Australian premium range above $100 also grew significantly this time up by 46%, with the top of the range pricing segment ($200+ per litre) contributing a further $17 million in export value.

Global demand for Australian wines shows no signs of waning with Australian wine exports continuing to experience strong growth in both value and volume. Overall, Australia is experiencing its highest export value growth rate in 15 years. China remains the fastest growing market for a sixth consecutive year with continued domination of the export market. With the support of the Australian Government’s $50 million Export and Regional Wine Support Package, contributing to a growth of 66% in export value to a total of $1.005 billion in 2018 (Table 6), cracking the $1 billion mark for export to a single country. China paid an average $5.71 per litre, up by 11% from the previous year, and is the strongest market for Australia’s premium wines (Table 6). The expectation is that the industry will experience continued growth boosted by a record-breaking Australian wine presence at the ProWine China Expo 2018, the leading international trade fair for wine and spirits.

Exports to the United Kingdom (UK) increased by 12% which is a positive turnaround from the decline experienced in 2017, remaining Australia’s largest export market in terms of volume, with 245.6ML shipped in 2018. It appears the volatility around Brexit negotiations has softened its impact on Australian wine exports to the UK.

Of the five largest markets only the United States of America (US) experienced a decline in growth over the last year. However the US still remains the second largest destination for Australian wines by volume and value. There was a decline of 11% in volume in 2017-18, dropping to 159.6ML from the previous year, which translated to $425 million for the industry in 2017-18 (Table 6). The US is the largest consumer of wine in the world and as part of Australia’s wine marketing strategy in the US, the opportunity for Australia to grow into the US premium wine market in the US recently commenced with the inaugural Australia Decanted event at Lake Tahoe, California. The event saw key influencers from US trade and media discovering Australian wine over a four-day education program, with US influencer feedback overwhelmingly positive.

An overall summary of exports by value and volume, depicting the largest markets by both metrics, is given in Figures 1 and 2.

Approximately 534 export shipments were transported in bulk totalling 458.9ML or $495.4 million (Table 7). This can be attributed predominantly to an 18% increase in bulk red in volume, translating to a 31% increase in value. Bulk white experienced a modest increase of 3% in volume or 11% increase in value to $193 million (Table 7).

Decreases in volume were experienced in the ‘Other’ category for white, wine dropping 5% to 2.5ML, and a drop of 21% in ‘Other’ wines overall to 6.4ML, translating to the value of $29.3 million in 2017-18. On the other hand, fermented sparkling wine reversed the decline experienced in 2017 to yield a modest growth of 3% to 8.6ML, translating to a value of $48.4 million (Table 7).

Once again red bottled exports remained the largest volume and value export category for Australia. For the 2018 financial year, a total of 259.1ML were shipped for a value of $1.75 billion reflecting a growth of 11%. Wine producers can received an average of $6.76 per litre for glass bottled reds which was the highest price paid for any wine style and container type. Glass bottled whites showed a slight increase in volume of 5% with 96.8ML exported contributing $378.9 million to the Australian economy (Table 7).

Rose wine also demonstrated strong growth in 2017-18 in exports (Table 7). Glass bottled exports saw 5.9ML exported corresponding to a total of $26.2 million, an increase of 21% from the previous financial year while bulk rose exports increased by 23% in value to $8.5 million.

Treasury Wine Estates (TWE) has claimed top ranking as the largest wine company both when ranked by export volume and value (Tables 16 and 17, pages 8 and 9). The top 5 exporting wine companies by volume remained unchanged from previous years while Zilzie Wines Pty Ltd regained a ranking in the Top 20 for export volume and value after two years of not being ranked amongst the largest wine exporters (Tables 16 and 17).

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