Wine Australia has released its 2022 Production, Sales and Inventory Report, which shows the national wine inventory has increased for the second consecutive year.
The report details how a drop in wine production around Australia was not enough to offset a reduction in total sales. This confirms that the challenging global conditions Australian wine has faced in the past two years, including China tariffs, global freight issues, and the COVID-19 pandemic, have all had quite the impact across the production chain.
Alongside these challenges, Australia has had a record-sized crush in vintage 2021, followed by a near-average crush in 2022, which has assisted inventory growth.
Peter Bailey, Wine Australia’s Manager for Market Insights, described how the report provides a clear picture of the industry’s position right name, based on survey reponses from some of the country’s largest wine producers.
“The challenges facing the Australian grape and wine community over the past couple of years has been well documented and this annual Production, Sales and Inventory Report for 2021–22 captures the impacts across the production chain,” Bailey said.
“Based on responses to the survey, total Australian wine production in 2021–22 is estimated to be just over 1.3 billion litres, which is a 12 per cent reduction compared with last year. There was a greater reduction in the amount of red wine produced compared with white, which saw its share of overall production reduced to 55 per cent compared with 58 per cent last year.
“Total sales – domestic and export combined – were reported to be down by nine per cent to 1.06 billion litres. This has led to the national inventory rising for the second year in a row.
“Combining the figures from last year and the findings from this year’s survey, the national inventory is estimated to sit at 2.27 billion litres. While some of this is necessary to replace stocks drawn down over the previous years when we didn’t produce enough wine to fulfil demand, the national inventory is now estimated to be above its long-term average.”
Other information within the Production Sales and Inventory Report 2022 shows the national stocks-to-sales ratio for red and white wine. This ratio for white wine has remained static compared to 2020-21 at 1.52, but increased for red wine by 35 per cent, to 2.77.
Wine Australia noted the full report is a snapshot of the national position, covering an estimated 77 per cent of total wine production, but is not representative of smaller wine business models. Every business is different, with a range of experiences driven by the multitude of challenges faced by the wider wine industry in recent years.
“Wine inventory levels fluctuate during the year, generally being at their maximum just after the new vintage (before any of that vintage has been sold), then depleting over the next 12 months as wine is sold, to be at a minimum just before the next vintage. However, transportation challenges in getting wine to market is reported to have had a flow on effect, with wine production capacity expected to be further constrained ahead of vintage 2023 as a result of the higher-than-average inventory,” Bailey said.
Wine Australia’s Production Sales and Inventory Report 2022 is available on its website.