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China fuels Aussie wine export growth

Published:  30 October, 2019

Australia’s wine exports grew 7% by value in the 12 months to 30 September 2019 to AU$2.89bn, Wine Australia has revealed.

Growth was driven in large part by the strength of exports to China, which rose 18% to a new high of AU$1.25bn, with average value skyrocketing 40% to $8.42 per litre FOB.

China, including Hong Kong and Macau, now accounts for some 43% of Australia’s wine exports.

“Australia’s long-term growth trend, coupled with France’s sudden decline, has led to Australia becoming the number one source for wine by value in China’s imported market for the first time,” said Andreas Clark, chief executive of Wine Australia.

Exports to the US rose 3% to AU$436m, while exports to the UK were down 4% at AU$365m.

“The positive numbers also reflect that the average value of bottled wine to all but three of our top 20 destinations are in growth and nearly all the major global regions imported more Australian wine in the past year, with the exception of Europe, which declined by 3%,” Clark said.

Globally, export volumes fell 8% to 774 million litres in the period. Volumes were down 16% in China, 9% in the US and 2% in the UK.

However, the decline in volumes pushed the average value of all exported wine up 16% to AU$3.74 per litre, its highest level in over a decade.

The average value of bottled-wine exports is running at a record AU$6.79 per litre.

The decline in global volumes is in contrast with the 12 months to end September 2018, when volumes were up 5%.

A like-for-like comparison also suggests that falling volumes may be hitting value growth, which was running at 11%.

Wine Australia points to smaller harvests in 2018 and now 2019 compared to the bumper year of 2017 as a key factor in the declining sales volumes.

The value growth in all price segments above AU$5 per litre FOB is evidence of the underlying strength of the country’s wine exports, it said.

Growth has been particularly strong above AU$10 per litre FOB, with the AU$10-to-AU$14.99 and AU$20-to-AU$29.99 brackets up 29% and 47% respectively. Exports over AU$10 per litre hit AU$1bn for the first time.

A 3% decline in the export value of unpackaged wine, which fell to AU$512m, was accompanied by a 10% contraction in export volumes. Together, these two developments pushed the average value up 9% to AU$1.22 per litre FOB.