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Asia’s thirst for Australia drives AU$2.56bn export high, but UK and USA dip

Published:  24 January, 2018

The most recent export figures from Wine Australia, released at the busy Australia Day Tasting (ADT) in London on 23 January, revealed that Australian wine exports to mainland China continue to boom in the wake of the 2015 free trade agreement between the two countries.

Reaching a post-economic crisis record of AU$2.46bn, the Australian wine industry experienced a 15% increase in the value of exports in the 12 months to December 2017, the biggest increase since 2004, with record volumes also shipped overseas, up 8% at 811 million litres.

The success of the free trade agreement, coupled with a strong growth in Chinese middle class consumption of wine for everyday drinking, also saw the average value per litre rising 7% to AU$3.16 – the highest since 2006.

Announcing the figures at ADT, Wine Australia CEO Andreas Clark said: “Growing demand for premium Australian wine, particularly in northeast Asia, increased the value of bottled wine exports by 15% to AU$2.1 billion.”

Bulk exports also increased in value by 10% to AU$440 million, while average value per litre across bulk and bottle wine priced above AU$10 a litre rose by 29% to a record AU$738 million.

In terms of Australia’s top five markets, mainland China now accounts for 33% of all export value, up 63% at AU$848 million, while Honk Kong (at number 5) shipped AU$118 million, up 7%.

Of the other three leading markets for Australia, both the US and UK fell by 2% in value, standing at AU$449 million and AU$348 million respectively, with Canada down 3% at AU$187 million.

Europe, where the UK accounts for a majority of Australian sales, rose a modest 1% in value, despite the dip in the UK, pointing to a modest upswing across the continent.

South East Asia and Oceania also grew by 2% and 8% respectively.

Australia will be looking to replicate some of its Asian successes in new territories in the Americas and Asia following today’s news that the Winemakers’ Federation of Australia (WFA) is expecting to sign a Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) in Chile this March.

WFA Chief Executive Tony Battaglene said of the CPTPP: “This agreement will provide real benefits to the Australian wine sector.”

“It will address tariffs as well as non-tariff trade barriers across a range of key and emerging export markets for wine which will be welcomed by winemakers across the country,” he added.

Under the CPTPP, tariffs would be eliminated for Australian winemakers trading with countries including Canada, Mexico, Peru, Malaysia and Vietnam.