Subscriber login Close [x]
remember me
You are not logged in.

Cheaper and mid-range Aussie wine imports boom as higher end slumps

Published:  13 June, 2018

Australian winemakers are struggling to capitalise on growing demand for premium wines in the UK, according to a report by the body representing the country’s wine industry.

Exports of Australian wine priced at $10 a litre or more to the UK have sunk by 14% in the past year, said Wine Australia.

“Economic instability, retailer consolidation and tax hikes are affecting demand for premium Australian wine in the UK,” said the body.

Meanwhile, British imports of Australian wine priced at $2.49 a litre or less rose by 13%. Imports of wine in the $2.50 to $4.99 bracket surged by 15%.

This helped drive an overall 9% value increase in Australian wine shipped to the UK, the country’s largest wine export market by volume.

Sub $2.50 a litre wine accounts for $205.2m of Australia’s total $373m wine exports to Britain. Most of this wine is shipped to Britain in bulk containers and bottled here.

Concerns over Brexit and the cost inflation and currency volatility arising from the leave vote are helping to drive growth in imports of cheaper Australian wine to the UK.

“The increase in value at $2.49 and under is influenced by some businesses shifting bottling to the UK from other countries in Europe,” said Australia Wine.

“With the easing of currency volatility that came with the Brexit decision, some brands are returning to bottling in Australia, resulting in a shift in value from bulk at under $2.49 to bottled exports at $2.50 to $4.99.”

The body also said that British supermarkets have begun to accept price increases from Australian wine importers.

Following the Brexit vote, Britain’s biggest off-trade wine brand Hardy’s suffered a 13.2% crash in volumes [Nielsen].

Commentators said the brand was unable to maintain its low price point after the crash in the pound’s value, resulting in widespread delistings.