Wine Australia has released its annual export report, providing a picture of the wine export industry in the year to 31 March 2023.

The wine export industry has had a difficult few years, with declines in value and volume and unfortunately, the trend does not seem to be ending in 2023.

Overall, Australian wine exports declined by seven per cent in value to $1.90bn, which is 18 per cent below the 10-year average value of $2.30bn. North America was down five per cent to $557m, and Northeast Asia also declined, down five per cent to $318m. Due to economic challenges and conflict in the region, Europe experienced the sharpest decline, down 17 per cent to $568m. Wine Australia Manager, Market Insights Peter Bailey also noted a continuing decline in exports to the UK.

“The UK is still experiencing the decline that we’ve previously reported, which is the result of elevated shipments over the past two years due to pre-Brexit demand and COVID-19 induced changes in consumer preferences,” Bailey said.

Promisingly, Southeast Asia is an emerging market, with exports to the region up nine per cent to $301m. This may prove important to the industry’s future prospects.

“A positive in the report is that Australia’s diversification into emerging markets is starting to bear fruit, which is beneficial for longer-term stability and growth. Southeast Asia grew strongly at both the commercial and premium ends of the price spectrum, and to key emerging markets including Thailand, Malaysia, Indonesia, Vietnam and Philippines,” Bailey added.

Exports in segments below $10 per little FOB all experienced a decline in value, with the biggest loss in exports valued between $2.50 to $4.99 per litre FOB. This segment is typically glass bottle exports to the UK, US, and New Zealand, and its decline affects the overall performance of the wine export industry. Luckily, exports above $10 per litre FOB remained stable in both value and volume, remaining at $621 million in value and 24 million litres in volume. Bailey attributed this change to a shift in customers’ purchasing habits.

“In traditional markets for Australian wine, the decline in the demand for wine is being felt the most in lower price segments while premium wine is still finding growth, as consumers purchase wine less frequently but are choosing to spend more on each wine product they purchase,” he explained.

Wine export also declined in volume overall, albeit less sharply than in value. Export volume was down 1 per cent to 620 million litres. However, this is still 16 per cent below the 10-year average volume of 736 million litres.

“In comparison to value, total shipment volume was relatively stable – with the large decline to the UK being outweighed by volume growth to the United States (US) and Canada, particularly in unpackaged wine, as global shipping conditions continue to improve,” Bailey said.

Of the varietals exported, Chardonnay was the most popular and saw an increase of export volume, up eight per cent to 162 million litres. Shiraz was the second most popular and Merlot the fourth, decreasing six and seven per cent respectively. The third most popular variety, Cabernet Sauvignon increased one per cent, and the fifth, Pinot Gris/Grigio decreased three per cent.

Another positive is the number of countries that Australia exported to. This increased to 118 destinations, compared to 112 in the same period in 2022. Daily, 15.9 million people drink Australian wine overseas.

“Australian exporters shipped wine to more individual destinations around the world. But it is also pleasing to see that the regional share of export value has remained even; with around a one-third share of Australia’s export value going each to Asia, North America and Europe,” Bailey commented.

The top five export destinations by value were:

  • US (down eight per cent to $381m, 20 per cent value share of total export value)
  • UK (down 20 per cent to $359m, 19 per cent share of total export value)
  • Hong Kong (down one per cent to $182m, 10 per cent share of total export value)
  • Canada (up two per cent to $174m, nine per cent share of total export value), and
  • Singapore (down 20 per cent to $134m, seven per cent share of total export value).

The top five export destinations by volume were:

  • UK (down 16 per cent to 208 million litres, 33 per cent share of total export volume)
  • US (up 15 per cent to 146 million litres, 24 per cent share of total export volume)
  • Canada (up 44 per cent to 73 million litres, 12 per cent share of total export volume)
  • New Zealand (down 16 per cent to 28 million litres, four per cent share of total export volume), and
  • Germany (down 17 per cent to 28 million litres, four per cent share of total export volume).

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