Challenging market conditions, including the ongoing high import tariffs imposed by China in November 2020 have continued to impact Australia’s wine exports with volume down 10 per cent to 625m litres and value down 10 per cent to $2.08bn in the 12 months to 30 June 2022.

Wine Australia said the declines were not unexpected because of the market conditions and the ongoing dispute with China, adding that these are expected to remain a significant influence on Australian wine exports until late in 2022.

Wine Australia Manager, Market Insights, Peter Bailey said that while the total data showed declines, key and emerging markets were offering some signs of encouragement.

“When mainland China is excluded from the data, exports increased by five per cent in value to $2.06 billion, an increase of $105 million – the highest value since 2009–2010. This is despite volume declining by three per cent to 619 million litres. The value growth for these markets was driven by a nine per cent increase in average value to $3.32 FOB per litre,” he said.

“The key contributors to the value growth included Singapore, the United States (US), Malaysia, Thailand, India and New Zealand.

“In the markets that experienced value growth, this was largely driven by exports in the higher value segments, particularly at $10 or more FOB per litre. This reflects the wine sales trends in many markets around the globe, which have seen a downward trend in commercial/value sales (less than US$10 per bottle retail) and sales growth in premium and above segments (US$10 or more per bottle retail).

“The above $10 or more FOB per litre price segment helped drive overall value growth to the US, which has returned to Australia’s top destination by value, and there was also a significant increase in the number of companies exporting to the US,” Bailey said.

Australian wine exporters shipped to 113 destination markets in 2021-22. Export growth was driven by Southeast Asia, up 51 per cent to $314m, North America, up five per cent to $612m, and the Middle East, up 48 per cent to $20m. This growth was offset by a decline in exports to Europe, down nine per cent to $658m and Northeast Asia (including mainland China), down 64 per cent to $328m.

To highlight just how significant the high tariffs imposed by China have been, the Wine Export Report in August 2020, before the tariffs fully kicked in, put the value of Australian wine exports to China at $1.1bn.

Excluding mainland China, there was growth in exports in all price segments at $5 or more FOB per litre, except at the top segment of $200 or more per litre. The strongest growth came at $10 or more per litre, up 32 per cent to $658m.

Bailey said: “Still red wine accounted for 92 per cent of the value of exports at $10 or more FOB per litre. This is critical as the reduction in exports to mainland China was predominantly still red wine. Off much smaller bases, still white wine and rosé also grew strongly in this price segment.”

The top five markets by value were:

  • US, up nine per cent to $436 million
  • UK, down 10 per cent to $421 million
  • Canada, down five per cent to $174 million
  • Hong Kong, down nine per cent to $170 million, and
  • Singapore, up 49 per cent to $169 million.

The top five markets by volume were:

  • UK, down 15 per cent to 227 million litres
  • US, up 10 per cent to 139 million litres
  • Canada, up four per cent to 53 million litres
  • New Zealand, up 13 per cent to 32 million litres, and
  • Germany, down 11 per cent to 32 million litres.

Andy Young

Andy joined Intermedia as Editor of The Shout in 2015, writing news on a daily basis and also writing features for National Liquor News. Now Managing Editor of both The Shout and Bars and Clubs.

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