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Boom times for Australian wine exports

Boom times for Australian wine exports  article image

Australian wine exports continued to experience strong growth in the 12 months to the end of June 2016 – particularly demand for premium wine in Asia and North America.

The value of exports grew by 11 per cent from July 2015 to June 2016, according to Wine Australia’s latest Export Report.

This was driven largely by bottled exports, particularly fine wine.

Bottled exports grew by 15 per cent to $1.7 billion and the average value of bottled exports increased by 9 per cent to $5.35 per litre, the highest since October 2003.

“Our finest wines contributed to almost half of the total value growth in the last 12 months,” said Wine Australia CEO Andreas Clark.

Exports priced at $10 “Free on Board” (FOB) and over per litre were up 26 percent to a record $499 million.

The FOB value of the wine is calculated when goods placed are on board the international carrier, at the border of the exporting country.

Mr Clark said the increased demand for Australian fine wine was reflected in the top five export markets.

“Exports priced $10 FOB and over to the United States grew by 16 per cent, mainland China by 71 per cent, the United Kingdom by 15 per cent, Canada by 12 per cent, and Hong Kong by 5 per cent,” he said.

“This growth contributed an additional $102 million to the value of Australia’s wine exports.”

Exports by region

All export regions recorded growth in the last year, except for Europe, which declined by 1 per cent to $574 million.

Northeast Asia continued to lead growth, with value increasing by $158 million (34 per cent) to $618 million.

Next in absolute growth was North America, growing by $46 million (8 per cent) to $646 million. Growth slowed to Southeast Asia, up $7 million (5 per cent) to $142 million.

Australian exporters continue to see benefit in export markets with free trade agreements (FTAs).

Exports to mainland China grew by 50 per cent to $419 million, despite a slowing economy. This exceptional growth was aided by the China-Australia Free Trade Agreement, and the growing Chinese middle class’ increased interest in wine.

When combined with Hong Kong ($124 million), China is the largest market for Australian wine exports.

Value to mainland China increased across the price segment spectrum, with the greatest growth once again in exports valued at over $10 per litre, up 71 per cent to $169 million.

Exports to Japan increased by 4 per cent to $45 million, while exports to South Korea were up 29 per cent to $13 million.

United States growth

The United States (US) remained Australia’s number one destination for wine by value and exports grew by 8 per cent to $449 million. The trend towards Australia’s premium wines continued with exports priced $10 and above per litre FOB increasing by 16 per cent, reflecting the improving perception of Australian wine among the US trade, with a growing number of importers taking on more premium Australian brands.

“There is still much work to do in increasing the awareness and availability of premium Australian wine in the US,” Mr Clark said.

“To continue sustainable growth in our most valuable market requires a long-term approach and a focus on re-establishing relationships and confidence in the category, supported by significant, consistent investment to drive the Australian fine wine message.”

Australia’s top five export markets by value

  • US – up 8 per cent to $449 million.
  • Mainland China – up by 50 per cent to $419 million.
  • UK – steady at $369 million (The UK market continues to be our most significant market in volume terms but, because 80 per cent of wine is shipped in bulk, it ranks third in value)
  • Canada – up 7 per cent to $195 million
  • Hong Kong – up 11 per cent to $124 million.

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Riley Kirkpatrick
23 Aug 2016
Agreed. We have certainly experienced a strong uplift in exports to China at Harland Wine Company and the general sentiment around the ChAFTA from our Chinese clients has been very positive. With strong interest from India and Vietnam as well the future of wine exports is looking very healthy.

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