China leads Australian wine exports

The value of Australian wine exports has surged 13% to AU$2.44 billion in the past 12 months ending 30 September, with mainland China leading the pack, representing 30% of the total wine export value, according to the Wine Australia Export Report released today.

A record AU$739 million worth of wines were shipped to mainland China during the period, representing a 56% increase on last year, making it the most valuable export destination for Australia, followed by the US, the UK, Canada and Hong Kong.

Explaining the growth, the trade organisation said: “The reduced tariffs through the China–Australia Free Trade Agreement has seen exporters now shipping directly to mainland China instead of Hong Kong. Also, as logistics and route-to-market practices evolve, some products are being sent earlier to market.”

In 2019, China will completely scrap tariff on Australian wines based on a gradual reduction plan of the FTA agreement signed in 2015.

Altogether, value exports to Greater China, including Hong Kong and Macau, increased by 42% to AU$853 million.

Australia exported wine to 124 countries during the period and the value of exports increased in 82. However, the value of exports to the UK dropped by 3% to AU$349 million, yet the country still remains its biggest volume importer, making up 28% of its total 799 million litres volume export.

Encouragingly, the report said that there was growth across almost all price points. Entry level and commercial wines priced at AU$2.49 per litre FOB and under, grew at 22% to AU$505 million, while premium wines priced above AU$10 per litre FOB, increased by 23% to a record AU$672 million.

“Established and new-to-market exporters are sharing in this strong export growth’, said Andreas Clark, CEO of Wine Australia. There were a record 2,102 active exporters in the period, up from 1,744 exporters in the same period in 2016. Of these, 1,475 exporters experienced a growth in exports of 28% (AU$451 million) to AU$2 billion.

In terms of grape varieties, red wines led by Shiraz continue to dominate exports, contributing to 74% of the export value. Shiraz alone represented AU$574 million of total export value, according to the report.

Red wine is also the standout growth category for table wine, growing by 16% to AU$1.8 billion. Exports of white wine also grew but at a much lower rate of 2% to AU$546 million.