Australian Wine Exports

Wine Exports

Australian wine exports grew at the strongest rate since 2003 thanks to a lower Australian dollar, a growing international appetite for bottled red Australian wines and a lowering of export barriers through new free trade agreements with China, South Korea and Japan (Table 6).

The total value of Australian exports in the year to June jumped by 11% from $1.89 billion in 2015 to $2.11 billion in 2016. It was the second consecutive year of export growth, which, combined with positive outlook for 2017, suggests the industry has finally entered a new growth phase.

Although growth was sustained throughout the entire year, the strongest growth was recorded in the final quarter. In the three months to September, value increased by 15% as a result of both faster volume growth (up 5%) and average value growth (up 9%).

The average value of Australian wine exports per litre also improved by 11%, up from $2.67 to $2.90, the highest level since 2009.

A breakdown of total exports by destination country (Table 7) shows the strong 2016 result was largely driven by sales to China, which jumped by 50% to $419 million in the year to June. Updated figures for the year to September 2016 showed further growth in sales to $474 million, making China the number one export market for Australian wine for the first time. Demand from China soared thanks to a combination of the benefits flowing from the new China-Australia free trade agreement and a rapidly expanding Chinese middle class, which is consuming imported wines more often and in vastly increased numbers.

Across the region, Hong Kong exports grew in value by 7% to $126 million in the year to September and recorded the highest average value for exports at $13.53 per litre.

China overtook the US, despite 4% growth in US sales to $448 million. The average value of US exports hit its highest level since 2009, up 12% to $2.93 per litre.

The UK remained Australia’s largest export market in volume terms, but with 83% of exports shipped in bulk, the UK ranks third in value. Exports were down 3% to $361 million as a result of an 11% decline in exports below $2.50 per litre.

Australia’s top five export markets by value were China (up 51%), the US (up 4%), the UK (down 3%), Canada (up 1%) and Hong Kong (up 7%).

While China led the surge in total exports, there was a broad-based increase in demand, with export value growing in 81 of the 122 destinations for Australian wine.

A feature of the year was growth in premium price segments of $10 or more per litre, which increased by 28% to a record $547 million (Table 4). This represented more half of the all the value growth in the year to September. Exports in these premium categories were up in all top five markets — mainland China up by 63%, the US up by 21%, the UK up 20%, Canada by 9% and Hong Kong by 7%. More than a third of Australian wine exports priced at $10 or more were destined for China, a 63% increase on the previous year.

All premium price segments above $10 per litre recorded strong growth. Sales in the $20 to less than $30 segment jumped by 38% to $78 million, while sales in the $30 to less than $50 range soared by 55% to $50 million.

Total bottled exports increased by 16% to $1,633 million in the year to June, driven by an 18% rise in red wine to $1,278 million (Table 8). In contrast, bulk sales decreased by 0.5% to $392 million. Fermented sparking wines decreased in value by 3% to $48 million.

Shiraz strengthened its position as the most favoured exported variety, with value increasing 20% to $488 million or almost one quarter of total exports by value. Cabernet Sauvignon exports rose almost as quickly, up 17% to $276 million, while Cabernet Sauvignon/Shiraz blends rose 7% to $118 million and Merlot increased by 5% to %97 million. Chardonnay was the only white variety among the top five exports, and went against the trend by declining 1% to $164 million.

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