Business

Australian wine export boom to US & Canada

The United States and Canada have emerged as the stars of the Australian wine export market in the year ended 30 September 2022.

Wine Australia’s latest Export Report shows exports to the US increased by 5% in value to $412 million and 14% in volume to 139 million litres, while wine exports to Canada increased by 10% in value to $190 million and 26% in volume 62 million litres.

However, Australian wine exports overall declined by 1% in volume to 627 million litres and 11% in value to $2.01 billion.

While the decline is reflective of the tough market conditions over the past two years – including high deposit tariffs on bottled Australian wine imported to mainland China, the impact of the global freight challenges, and the aftermath of changing consumer habits during the COVID-19 pandemic – the figures also reflect that value is starting to stabilise.

Wine Australia Manager, Market Insights Peter Bailey said: “As a moving annual total result, the Export Report can demonstrate the performance of Australia’s exports and highlight some growing trends. In this report, we’re seeing the tail end of the decline in exports to mainland China having an impact on the total export figures; this is expected to wash out of the figures by the end of 2022.

“When mainland China is excluded from the data, wine exports to the rest of the world held steady in value, declining by 0.2% to $1.99 billion and increasing by 1% in volume to 622 million litres.

“There was a decline in exports to the United Kingdom, Hong Kong and Singapore, which is a result of the return to anticipated shipment levels. This decline to the UK has been delayed compared to other markets with similar COVID-19 consumption patterns, such as the United States and Canada.

“Exports to the North America and Southeast Asia regions are showing growth. In particular, strong growth was recorded in exports to the US, Canada, Malaysia and Thailand.

“Pleasingly, the growth trend in the US and Canada was driven by both ends of the price spectrum; premium wine exports continued to grow and unpackaged commercial exports increased, as shipments of the record 2021 vintage accelerated following a slower than usual start due to global shipping pressures.

“Furthermore, the number of exporters to the US is at the highest level since 2008 and of the exporters to the US that ship wine at a value of $10 or more per litre free on board (FOB), 75 per cent experienced growth demonstrating that green shoots continue in the market for premium Australian wine.

“However, while total exports look to be stabilising, the wine sector can continue to expect market fluctuations, as rising inflation and interest rates may put pressure on margins and curtail consumer spending in key markets. On a positive note, over the past few months, the Australian dollar has depreciated against the US Dollar, which assists Australian wineries to be more competitive in the US.”

Australian wine exporters shipped to 118 destinations during the period, up from 111 the previous year. The strongest growth came from North America, up 6% to $604 million, and Southeast Asia (up 15% to $291 million). However, the large decline to Northeast Asia (down 46% to $321 million, driven by mainland China) and to Europe (down 12% to $621 million, driven by the UK’s return to more normal shipping levels) outweighed the growth to other regions.

Top 5 markets by value

  1. US – up 5% to $412 million
  2. UK – down 14% to $395 million
  3. Canada – up 10% to $190 million
  4. Hong Kong – down 21% to $163 million
  5. Singapore – down 16% to $132 million

Top 5 markets by volume 

  1. UK – down 12% to 222 million litres
  2. US – up 14% to 139 million litres
  3. Canada – up 26% to 62 million litres
  4. New Zealand – up 14% to 32 million litres
  5. Germany – down 7% to 31 million litres

Read the full report here.

Processing…
Success! You're on the list.

Categories: Business