Exports of Australian wine fell by 10% to AUD1.87bn [US$1.27bn] in the year to the end of June thanks to marked declines in key markets the US and the UK, plus mixed fortunes in Asia.
The figures cap a miserable few years for the country’s wine industry, which saw its most lucrative market, China, effectively removed in late 2020 thanks to the imposition of crippling import sanctions by Beijing.
Producers are increasingly optimistic that those tariffs may be eased in the near future, but have warned that – even if they are – it could take years to rebuild momentum.
Exports to Europe fell -15% to AUD556m, largely because of a -14% slump in the UK, with declines recorded in 12 out of the top 13 markets.
The UK regained its status as Australia’s leading export destination by value, leapfrogging the US thanks to the latter’s -18% decline. Shipments to North America fell -14% to AUD525m.
Meanwhile, Asia recorded a -4% contraction to AUD637m, including a decline in Singapore and an increase in Hong Kong – two key trading hubs in the region.
Wine Australia said exports were impacted by the continued decline in shipments of lower-priced packaged wine to the US, and by a slump in the UK following two years of elevated shipments caused by pre-Brexit demand and the impact of Covid-19.
More than half the decline in shipments occurred in the AUD2.50-4.99/litre FOB (free on board) segment – largely packaged wines selling in lower-priced retail segments.
“Wine consumption in mature markets is in decline, driven by decreases in the commercial price segments,” said Peter Bailey, Wine Australia manager, market insights. “This is impacting Australia’s export performance, especially in the US, as Australia is very exposed to the price segments in decline.”
Exports by volume edged down by only -1% to 621m litres, holding up largely thanks to a short-term, supply-driven increase in bulk wine shipments, especially to Canada. Bailey attributed this to the easing of the shipping challenges of the past two years.
Earlier this month, Treasury Wine Estates announced the closure of its Karadoc winemaking facility in Victoria, and said it will look to sell two “commercial vineyards” in Victoria and New South Wales, blaming the “global decline in commercial wine consumption [and] rising costs”.
