The fastest growing export markets for Australian wine

Australian wine exports declined by 10% in volume to 625 million litres and 19% in value to $2.08 billion in the year ending 30 June 2022, but there are signs of growth in key and emerging markets.

Wine Australia’s latest Export Report released this week shows the United States is now Australia’s top market by value, up 9% to $436 million and its second biggest market by volume, 10% to 139 million litres.

In 2021–22, Australian wine exporters shipped wine to 113 destination markets. At a region-level, the most significant growth came from exports to Southeast Asia, up 51% to $314 million, but also to North America, up 5% to $612 million, and the Middle East, up 48% to $20 million. This growth was offset by a decline in exports to Northeast Asia (including mainland China), down 64% to $328 million, and Europe, down 8% to $658 million.

Wine Australia Manager, Market Insights, Peter Bailey said: “When mainland China is excluded from the data, exports increased by 5 per cent in value to $2.06 billion, an increase of $105 million – the highest value since 2009–2010. This is despite volume declining by 3% to 619 million litres. The value growth for these markets was driven by a 9% increase in average value to $3.32 FOB per litre,” he said.

“The key contributors to the value growth included Singapore, the United States (US), Malaysia, Thailand, India and New Zealand.

“In the markets that experienced value growth, this was largely driven by exports in the higher value segments, particularly at $10 or more FOB per litre. This reflects the wine sales trends in many markets around the globe, which have seen a downward trend in commercial/value sales (less than US$10 per bottle retail) and sales growth in premium and above segments (US$10 or more per bottle retail).

“The above $10 or more FOB per litre price segment helped drive overall value growth to the US, which has returned to Australia’s top destination by value, and there was also a significant increase in the number of companies exporting to the US.”

The top five markets by value

  1. US – up 9% to $436 million
  2. UK – down 10% to $421 million
  3. Canada – down 5% to $174 million
  4. Hong Kong – down 9% to $170 million
  5. Singapore – up 49 per cent to $169 million

The top five markets by volume

  1. UK – down 15% to 227 million litres
  2. US – up 10% to 139 million litres
  3. Canada – up 4% to 53 million litres
  4. New Zealand – up 13% to 32 million litres
  5. Germany – down 11% to 32 million litres

Challenging market conditions for Australian wine

The overall decline in volume and value of Australian wine exports reflects the continued impact of the significant reduction in exports to mainland China, driven by high deposit tariffs imposed in November 2020.

Wine Australia said this is expected to remain a significant influence on the moving annual total data of Australian wine exports until late 2022. 

During the 2021–22 financial year, the operating environment for many Australian wine exporters had been extremely challenging with the significant decline in exports to mainland China, the ongoing impact of the pandemic – including severe shipping delays and increased freight costs – and rising inflation, business costs and interest rates.

Excluding mainland China, there was growth in exports in all price segments at $5 or more FOB per litre, except at the top segment of $200 or more per litre. The strongest growth came at $10 or more per litre, up 32% to $658 million. Markets from all parts of the world contributed to growth in this price segment, including key markets within Southeast Asia, North America, Europe and Northeast Asia.

“Still red wine accounted for 9% of the value of exports at $10 or more FOB per litre,” Bailey said. “This is critical as the reduction in exports to mainland China was predominantly still red wine. Off much smaller bases, still white wine and rosé also grew strongly in this price segment.”

The value of wine exported in glass bottles decreased by 21% to $1.57 billion in the past financial year while the average value per litre decreased by 8% to $6.69 FOB per litre. Volume decreased by 14% to 233 million litres. Mainland China was the main contributor to the decline in exports in glass bottles. Excluding mainland China, exports in glass bottles to the rest of the world increased in value by 11% to $1.55 billion, volume by 1% to 232 million litres and the average value by 10% to $6.67 FOB per litre.

Unpackaged wine exports decreased by 13% in value to $500 million and decreased 7 per cent in volume to 384 million litres. The average value of unpackaged wine decreased by 6% to $1.30 FOB per litre. A decline in the volume of unpackaged exports to the United Kingdom (UK) and, to a lesser extent, Germany and the Netherlands, more than offset increases to the US, Canada and New Zealand.

In 2021–22, still red wine exports decreased by 26% in value to $1.39 billion, while still white wine exports increased by 7% to $579 million. The decline in red wine exports was driven by mainland China and to a lesser extent, the UK. For white wine, destinations in growth included the US, UK and Canada.

China continues to crush Australian wine exports

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