Australian wine exports grow by 3% to $2.91bn
Exports of Australian wine grew by 3% by value to reach AU$2.91 billion in the year to December 2019, the second highest yearly figure ever achieved.
Australia witnessed a marked increase in the export of higher-priced wine last year, a report by Wine Australia has found.
Exports of wines priced above AU$10 per litre FOB reached a record $1.1 billion in 2019.
The value of Australian wine exports is now approaching the levels achieved before the global financial crisis of 2007-2008. The average value of exported wine per litre FOB increased by 18% to $3.91 last year, the highest figure achieved since 2006.
Export volumes, however, continue to fall after smaller vintages in 2018 and 2019.
Wine Australia chief executive officer, Andreas Clark, said he anticipated that the coronavirus would have an impact on sales of Australian wine this year, given Australia’s strength in the Chinese market.
“At this stage it is difficult to predict the degree of that impact,” he added. “Our first concern is people’s wellbeing in China and elsewhere, and there will be time down the track to consider other impacts.”
Exports of bottled wine grew by 7% in value to hit $2.4 billion, but fell by 5% in volume to 342m litres. Exports of unpackaged wine, however, fell by 12% in value to $488m and decreased by 18% in volume to 395m litres.
Wine Australia’s report revealed that the $10 per litre and above FOB is now the biggest price segment of Australian wine exports, accounting for over a third of the total export value.
In 2019, Australia exported wine to a total of 120 markets, with Asia continuing to be an area of growth for the country’s wines. Exports to northeast Asia rose by 11% by value to $1.37 billion, while those to southeast Asia also increased by 17% to $200m.
The country’s top markets were China, the US, the UK, Canada, and Singapore.
Exports to China, including Hong Kong and Macau, were up 12% by value to $1.28bn, however volume declined 17% to 142 million litres. Australian wine now accounts for 35% of the total wine imported to China by value, compared to France with 29%. Chile exports a greater volume of wine to China, but ranks third in value exports.
In 2019, Australia spent $8 million on the ‘far from ordinary’ campaign in the US, its most significant promotional effort in the market to date.
Targeting both the trade and consumers in several key cities, Wine Australia said the effort generated a “significant uplift” in sales in the second quarter of the calendar year.
850 new wine accounts were set up between August and October 2019 resulting in 1,204 new points of distribution in the US. While overall exports fell by 1% in value to $419 million last year, the average price per litre FOB rose by 15% to $3.05. This made 2019 the first year since the 2008 that the average value has exceed $3 per litre.
Meanwhile, exports to the UK fell by 9% in value to $352 million and by 9% in volume to 224 million litres.
The impact of the bushfires on wine exports remains yet to be seen. While only 1% (the equivalent of 1,500 hectares) of the country’s vineyard area was destroyed by the fires, it is believed a greater area was affected by smoke taint.
Two of Australia’s leading wine science organisations, the National Wine and Grape Industry Centre (NWGIC) and Charles Sturt University in New South Wales, are working with growers to test grape samples in order to understand the potential impact of the smoke exposure. The findings will help wine producers make decisions about what to do with their harvested grapes.