Top crop and export growth reported from 16th Aussie wine conference

By Jo Gilbert

Published: 25 July, 2016

A strong 2016 vintage, a low Aussie dollar and thriving trading partners has the Australian wine industry well placed to increase its share of global markets.

The Australian wine sector recorded increases in volume and average purchase price of wine grapes this year, according to the Vintage Report 2016 released today in Adelaide by the four-day Australian Wine Industry Technical Conference (AWITC) currently running until July 28.

In what is widely regarded as a top quality vintage, this year there was an increase of 6% in production to an estimated 1.81 million tonnes, led by South Australia.

The report also shows the average price paid for wine grapes grew by 14% to $526 per tonne across Australia, the highest average price since 2009.

Wine Australia CEO Andreas Clark told the 16^th AWITC in Adelaide, South Australia, that global sales of Australian wine was also on the rise thanks to a surge in bottle exports.

"Numbers for June 2016 released this month showed strong growth of 11% to 2.11 billion in the 12 months to June. The average value of those exports grew by 11% to $2.89 a litre, which is the highest level since February 2010.

"Average values of bottled wine exports increased by 9% to $5.35 per litre, which is the highest level since October 2003. There's a very strong story coming through there," he said.

The United States is Australia's biggest export market ahead of the United Kingdom and China, but uncertainty following the Brexit vote and the ongoing appetite for Australian wine in Asia has China set to become the biggest importer of wine from Down Under in the long term.

In the short term, however, strong growth in the premium wine market in the United States on the back of a resurgent economy and relatively low Aussie dollar is seen as an immediate opportunity for Australian exporters.

Australian wine is number one by volume and second to Italy by value of wine imported into the United States.

But it is the strong growth in the $10 plus category that is showing the greatest potential.

"We think the US is the largest prize on offer at the moment," Clark said.

"We need to bring exporters and more quality producers back in to that market. China is continuing to show very strong growth. Education is our major platform there. We just need to continue to amplify our premium message into China."

South Australia continued to be the nation's biggest contributor to the wine industry, boosting its volume to reach 51% of the total 2016 crush.

Winemakers' Federation of Australia acting CEO Tony Battaglene said there had been uniform strong praise about the quality of wine from the 2016 vintage.

"There's certainly very positive signs," he told the AWIT Conference in the South Australian capital.

"We do have cautious optimism about the future, certainly the 2016 vintage data and the related macro-economic export data suggest a positive trend but it's clearly very, very important that we continue the industry investment in growing our export markets.

"It's quite clear that we need to remain proactive as a sector to continue to grow this demand and to build upon the steps we've made, particularly in the key markets of the United States and China."

Photo by Andy Steven.

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