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China now Australia’s biggest wine export market

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China is now the top export market by value for Australian wine, with exports soaring 51% in the past year to $474 million.

Wine Australia’s latest Export Report shows more than a third of Australian wine exports priced $10 and more per litre (FOB) were destined for China.

This is a remarkable result considering just a decade ago Australian wine sales to China were worth just $27 million.

Negociants International executive director Adam O’Neill said the demand premium wines in China showed no signs of abating.

This has been largely driven by online platforms such as Alibaba’s TMall which is helping Australian exporters find new customers.

Wine Australia CEO Andreas Clark said the China-Australia Free Trade Agreement (CHAFTA) had also contributed to the stellar result.

Overall, from October 2015 to September 2016, the value of Australian wine exports grew by 10 per cent to a total value of $2.17 billion.

Big demand for premium wines

Growth was primarily driven by bottled exports, particularly premium wines.

Bottled exports grew by 14 per cent to $1.8 billion and the average value of bottled exports increased by 9 per cent to $5.47 per litre – a 13-year high.

“The latest figures show that Australian wine exports continue to see strong growth and it’s our finest wines that are most in demand,” Mr Clark said.

More than half of the total value growth in the last 12 months was in wines priced at $10 or more per litre free-on-board (FOB) and value was up 28 per cent to a record $547 million.

“Of the 1743 active exporters across the period, 70 per cent contributed to the value growth, an outstanding result, Mr Clark said. “The value of exports grew in 81 of the 122 destinations for Australian wine.”

Exports priced $10 and more per litre FOB were up in all top five markets – mainland China by 63 per cent, the United States by 21 per cent, the United Kingdom by 20 per cent, Canada by 9 per cent, and Hong Kong by 7 per cent.

Exports by region

All export regions recorded growth in the last year, except for Europe, which declined by 3 per cent to $570 million.

Northeast Asia is now our number one export region, growing by $177 million (35 per cent) to $678 million. North America was up by $21 million (3 per cent) to $639 million, while Southeast Asia grew by $15 million (11 per cent) to $152 million.

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

Exports were also up in Singapore by 9 per cent to $62 million, Malaysia by 24 per cent to $55 million, Taiwan by 23 per cent to $19 million and South Korea by 42 per cent to $14 million.

Exports to Japan saw a small decline of 0.3 per cent to $45 million, due to a decline in bulk wine exports.

Australia’s top five export markets by value

Mainland China – $474 million (up 51%)

US – $448 million (up 4%)

UK – $361 million (down 3%)

Canada – $190 million (up 1%)

Hong Kong – $126 million (up 7%).

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