Wine Australia has released its latest Export Report, which shows significant declines in both the value and volume of Australian wine exports in the year ended December 2021.

Reflecting the ongoing impact of the tariffs imposed on bottled Australian wine imported into mainland China as well as the global freight crisis the value of Australian wine exports fell 30 per cent in value to $2.03bn and 17 per cent in volume to 619 million litres.

The tariff issue with China was the biggest driver of the decline, with exports to mainland China down 97 per cent in value to $29m and down 93 per cent in volume to 6.4 million litres. This is a loss of nearly $1bn in value and 90 million litres in volume, when compared to the 2020 calendar year where shipments were free from tariffs for most of the year.

Wine Australia General Manager Corporate Affairs and Regulation Rachel Triggs said the Australian wine export community was managing its way through exceptionally challenging times.

“The 2021 calendar year represents the first full 12-month period since very high deposit tariffs on Australian wine imported to China were imposed, and the global impact of the challenging operating environment can now be observed in full,” Triggs said.

“Because the export figures are compared to the prior 12-months, we’ll keep seeing significant differences in the year-to-date export figures as a result of the deposit tariffs until the end of 2022.

“Exports excluding mainland China increased by seven per cent in value to $2bn and decreased by six per cent in volume to 613 million litres. This is the first time that exports excluding mainland China have reached $2bn for a calendar year since 2009.”

The markets with the largest increase in value of Australian wine exports were Singapore (up 108 per cent to $166m), Hong Kong (up 45 per cent to $191m), South Korea (up 74 per cent to $47m), Taiwan (up 65 per cent to $31m) and Thailand (up 31 per cent to $28m).

Exports valued at above $10 per litre FOB increased in value by 49 per cent when excluding mainland China, giving positive signs that demand for products which would previously have been exported to China is emerging in other markets and highlighting the importance of the Australian grape and wine sector investing in market diversification.

Triggs added: “The pandemic is still disrupting the on-trade, the global freight crisis is continuing to cause shipping delays and increased freight costs, and while there was export growth to many destinations, it will take time to offset the loss in trade to mainland China. This is not something that will happen overnight, nor within a year. But the Australian wine sector is resilient, and there are early signs that hard work in expanding and diversifying markets is paying off.”

Aside from the loss of shipments to mainland China, the significant drop in volume was also attributed to low wine inventory levels at the start of 2021 after three small vintages and delays in getting the large 2021 vintage onto ships due to the ongoing global freight crisis.

In the 2021 calendar year, 201 million litres of 2021 vintage wine was shipped, which is about 10 per cent less than the 2017, 2018, and 2020 vintages at the same time in their respective years, and seven per cent ahead of where the 2019 vintage was at this stage.

“A relatively high share of the small 2020 vintage was brought forward to ship in 2020, leaving a smaller amount left to ship in 2021. The 2020 vintage was the smallest vintage since 2007 and much of it was shipped in 2020 to the UK and the US in response to increased demand for Australian wine during COVID-19 and ahead of the Brexit transition conclusion,” Triggs said.

In the year ended December 2021, Australian exporters shipped wine to 112 markets, compared with 114 the year before.

The top five markets by value were:

  • UK, down one per cent to $453 million
  • US, down seven per cent to $403 million
  • Hong Kong, up 45 per cent to $192 million
  • Singapore, up 108 per cent to $166 million, and
  • Canada, down 14 per cent to $164 million.

The top five markets by volume were:

  • UK, down nine per cent to 243 million litres
  • US, down eight per cent to 125 million litres
  • Canada, down 16 per cent to 47 million litres
  • Germany, down one per cent to 34 million litres, and
  • New Zealand, down seven per cent to 31 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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