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Value of Australian wine exports hits highest level in a decade

Value of Australian wine exports hits highest level in a decade article image

The total value of Australian wine exports increased by 5 per cent to $2.78 billion in the 12 months to March 2019.

With the average value per litre climbing to $3.41, this is the highest level since 2009.

The continued growth in the value of exports was an extremely positive trend for the sector, says Wine Australia Chief Executive Officer Andreas Clark.

While the volume of exports had declined slightly by 3 per cent to 814 million litres (90 million 9-litre case equivalents), the value has increased overall.

Mr Clark said the figures show global wine consumers are drinking less but consuming more expensive wines.

This places the Australian wine industry in a good position, he says.

“In the China market we have grown our value again and we are outperforming competitors,” Mr Clark said.

Wine reportGlobal Trade Atlas figures show that in the year ended February 2019, Australia had a 29 per cent share of the imported wine market – up from 26 per cent a year ago.

“We are also seeing positive trends in the USA off-trade market where sales of Australian wine grew 3 per cent in value to US$521 million in the year ended December 2018,” Mr Clark said.

“Even more encouraging is that Australian wine priced above US$15 per bottle has also grown by 3 per cent according to market monitor IRI Worldwide.”

Wine supplies will remain tight

Mr Clark said Australian wine supplies would remain tight in the short term with much of the 2018 vintage yet to hit the market and the expectation that 2019 vintage would be below the long-term average.

In the year ended March 2019, there was robust growth in most price segments with exports in higher priced categories recording the most significant growth.

In the 12 months to March 2019, the value of wine exported in glass bottles increased 3 per cent to $2.22 billion and decreased in volume 5 per cent to 355 million litres (39 million 9-litre case equivalents). The combination of the increased value and lower volume means that the average value of bottled wine increased 9 per cent to $6.24 per litre FOB, a near-record.

Other packaging formats include soft pack, which increased 12 per cent in value to $15 million and 9 per cent in volume to 7.7 million litres, and other alternative packaging, which decreased by 2 per cent in value to $6.2 million and 10 per cent in volume to 964 thousand litres.

Growth in nearly all regions

Shipments of unpackaged wine increased in value by 11 per cent to $541 million and decreased in volume by 2 per cent to 450 million litres (50 9-litre case equivalents). The average value of unpackaged wine exports increased by 14 per cent to $1.20 per litre FOB.

Nearly all destinations imported more Australian wine in the year ended March 2019 than the previous period. North America is still the exception, with excellent growth in exports to Canada unable to outweigh the decline in exports to the US.

The regions in growth are:

  • Northeast Asia, up 8 per cent to $1.2 billion
  • Europe, up 3 per cent to $612 million
  • Southeast Asia, up 7 per cent to $170 million
  • Oceania, up 15 per cent to $107 million and 
  • Middle East, up 16 per cent to $32 million

Australian wine exports to China (including Hong Kong and Macau) increased by 7 per cent in value to $1.11 billion and decreased by 14 per cent in volume to 154 million litres (17 million 9-litre case equivalents) in the year ended March 2019.

All exporter segments showed healthy growth rates

The volume decline in the China market is confined almost exclusively to exports in the below $2.50 per litre value segment, reflecting both a tightening of Australian supply in this segment and also the increased supply availability from competitors such as Chile.

There were 2603 active exporters in the period, a 16 per cent increase from the previous year. During the year, 1786 companies either started exporting or increased the value of their exports, contributing $374 million to the growth in overall value. This growth was partially offset by 1328 exporters whose export value decreased or they ceased shipment altogether. Their exports declined by $246 million.

Volume and value growth rates by exporter size illustrate largely positive performances.

While volume decreased by 4 per cent for the largest exporters (those exporting more than 100,000 9-litre case equivalents), all other exporter segments showed healthy growth rates in both volume and value, with the smallest exporters exhibiting the strongest growth.

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