Wine Australia’s Australian Wine Production, Sales and Inventory Report 2024 has found that total sales of Australian wine have exceeded production for the second consecutive year.
The report found one billion liters were produced, an eight per cent increase from 2022-23. Despite an increase in production over the last two years, it still sits 16 per cent below the 10-year average of 1.24 billion litres.
According to the report there has been a 20 per cent increase in white wine production, jumping from 46 per cent of total wine production to 51 per cent. This was the first time in 12 years that white wine has exceeded red production, with the latter falling by two per cent in this financial year. This is due to the adjustments made to counteract the oversupply of red wine which has occurred over the last three years.
Peter Bailey, Manager and Market Insights at Wine Australia said that the results are a combination of seasonal factors and economic market conditions.
“This was another difficult season in many regions, with heavy rainfall and flooding, widespread windy conditions affecting flowering, and dry spring weather leading to cold nights and the potential for frost damage,” he said.
“However, the result has also stemmed from deliberate decisions by grapegrowers and wine businesses to reduce production or intake, driven by the current economic and market conditions affecting demand for wine.”
Domestic and international sales saw little decrease, with a total volume of 1.8 billion litres exported, down just one per cent from the previous year. Red wine exports saw a four per cent increase, due to the re-opening of the Chinese market and the relaxation of tariffs on Australian wine imports to China. Over the 2023-24 financial year, the volume of exports to China grew from one million litres to 32 million litres, accumulating to five per cent of total wine exports.
“It will take some time before there is a clearer picture of how Chinese consumers are responding to the increased availability of Australian wine in–market,” Bailey said.
The stock-to-sale ratio (SSR) for small vintages fell by 14 per cent, after seeing a 10 per cent reduction in inventory. The SSR for white wines decreased below the 10-year average while red wine remained 15 per cent above its 10-year average.
“The survey results indicate that stock-to-sales ratios have reduced, and production and sales are closely aligned. However, that is based on the current production levels, which are well below the long-term average,” Bailey said.
Bailey added that that world wine consumption will continue to decline over the next five years.. This is due to economic constraints, alcohol moderation trends and competition with other alcoholic beverages that have increased in popularity.
“Total global wine imports to China have fallen by two-thirds since 2017, so it is unlikely that we would return to our previous level of exports to that market. Meanwhile our wine sales to the rest of the world, including Australia, have been under pressure for the past several years as consumption has declined and competition has increased. We are unlikely to see a return to our previous average of 1.2 billion litres in the next few years,” he said.
Wine Australia’s Grape Price Indicators dashboard shows the latest figures from the report. See here for the full Australian Wine Production, Sales and Inventory Report 2024.