Demand from China and US drive Australian wine exports to $2.86bn

Australian wine exports have increased by 4% in value to $2.86bn in the 12 months to June 2019, due to continued demand from China and the US.

Export volumes recorded a 6% decline to 801 million litres (89 million 9l case equivalents) due to a 7% decrease in shipments of wine below average value of $2.50 per litre free on board (FOB), resulting in a 10% increase in the average value of exported wine to $3.58 per litre, the highest level since 2009.

Wine Australia chief executive officer Andreas Clark said: “The strong growth in average value is positive for the wine sector and the broader economy as it lifts returns for wine businesses and flows through to regional economies through higher grape prices.

“Our National Vintage Report 2019 released last week shows that the average grape price has lifted for the fifth year in a row, reaching $664 per tonne, the highest level since 2008.

“The turnaround in exports to the USA, which grew by 2% in value to $432 million, is pleasing. Average value increasing 6% to $2.83 per litre, the first growth in two years, rewards the efforts of the many exporters who are working actively in that market to change perceptions about Australian wines and communicate about the diversity and excellence of Australia’s offering.

“There were increases across most major price segments in the USA with the standout segment for growth being $7.50 to $9.99 per litre FOB.”

Australian wine exports to China, including Hong Kong and Macau, reached a financial year record, increasing by 7% in value to $1.2bn. However, volume dipped by 16% to 154 million litres (17 million 9l case equivalents) due to a FOB decline of wines below $2.50 per litre.

He said that Australian wine exports to China figure behind Chile and France in export volume and second to France in export value.

However, in the first five months of this year, Australia overtook France to become the leading imported wine category in mainland China in terms of value.

Australia’s imported market share increased by 13 percentage points since 2015 to 24% based on volume, aided by the contraction of the total import market.

According to Clark, the UK market witnessed a slight decline with value decreasing by 3% to $373m and volume by 4% to 236 million litres (26 million 9l case equivalents), while average value increased by 1% to $1.58 a litre.

The decline in volume indicates that some larger brands have solidified strategies to get additional products into market pre-Brexit to counter any disruption to exports.

He said that Australian wine supplies are expected to remain tight in the medium-term with the National Vintage Report revealing that the 2019 vintage was 1.73 million tonnes, 1% below the ten-year average.