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China’s thirst for Australian wine is fast maturing

China’s thirst for Australian wine is fast maturing article image

Australian wine exports to Northeast Asia grew by a staggering 24 per cent to $1.14 billion for the year ended September 30, new figures show.

And wine sales to the emerging Middle East market grew by 41 per cent to $30 million.

Overall, wine exports experienced strong growth in both value and volume, with an increase of 11 per cent in value to $2.71 billion, according to the Wine Australia report.

Volume increased by 5 per cent to 842 million litres (or 94 million 9-litre case equivalents) for the 12-month period.

Andreas Clark, CEO of Wine Australia, says wine exports have achieved double-digit growth for three years in a row, on a year ended September basis.

“Just five years ago, Australian exports were worth $1.813 billion, and value had grown just 1 per cent over the previous 12 months,” he said.

“These figures are the result of a lot of hard work by Australia’s 2401 wine exporters.

“Australia exports more than 60 per cent of the wine we produce, so it’s important that we continue to build our export markets.”

Wine Australia is now running Growing Wine Export workshops in regional Australia to help new and experienced exporters to grow their exports.

Healthy growth

In the 12 months to September 30, there was healthy growth across the price spectrum.

Exports above $10 per litre increased by 20 per cent to $804 million, with the $20 to $29.99 segment in particular, showing considerable growth. Below $10 per litre, the $5 to $7.49 segment was the star, growing by $50 million, Mr Clark said.

Exports grew to all but one of the major destination regions. The standout growth of 24 per cent was experienced in Northeast Asia, where exports grew to $1.14 billion in value, while in North America, a $16 million increase in exports to Canada only partially offset a $38 million decline in exports to the United States.

Regions in growth:

  • Northeast Asia, by 24 per cent to $1.14 billion
  • Europe, by 5 per cent to $604 million
  • Southeast Asia, by 5 per cent to $170 million
  • Oceania, by 21 per cent to $105 million, and
  • the Middle East, by 41 per cent to $30 million

Shipments of bottled wine increased by 8 per cent in value to $2.16 billion and 2 per cent in volume to 366 million litres (41 million 9-litre case equivalents).

Shipments of unpackaged wine also grew strongly, with a 23 per cent increase in value to $525 million and a 9 per cent increase in volume to 468 million litres.

There were also increases in the average value of wine exported, with a 7 per cent increase for bottled wine to $5.90 per litre, a 13 per cent increase of unpackaged wine to $1.12 per litre and a 5 per cent increase of all wine exported to $3.21 per litre.

China and US a key focus

ExportReport

Growing the China and the US markets is the key focus of the Australian Government’s $50 million Export and Regional Wine Support Package, Mr Clark said.

“We are seeing strong growth in China and we have redoubled our efforts in the USA to capture more of the premium end of the market as American consumers trade up to higher priced wines.

“There is positive sentiment about Australian wine in the USA among key influencers and consumers. While consolidation at the distribution level of the three-tier system is proving to be a difficult barrier to overcome, the hard work of Australian exporters willing to get in to market is starting to pay off.”

According to Wine Australia, wine sales in the on-trade have increased by 4 per cent in value in the year ended June 2018 to US$267 million (Nielsen-CGA) and sales in the off-trade have increased by 3 per cent to $522 million (IRI Worldwide).

“In the off-trade, ground is being made at premium price points, with Australian sales up by 1 per cent in the US$15 to $19.99 per bottle segment and up 29 per cent in the US$20 to $24.99 per bottle segment,” Mr Clark said.

There is also solid growth in sales of Australian Cabernet Sauvignon and Chardonnay.

“These positive trends, as well as a favourable exchange rate, are laying the foundations for Australian wine to find success again in the world’s largest wine market.”

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