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Oz exports close in on pre-GFC levels, with shift to higher value

Published:  05 February, 2020

Global exports of Australian wine continued to grow in value during 2019, up 3% to A$ 2.91bn over the previous year.

Figures released by Wine Australia showed that the average value rose by 18%, to A$3.91 per litre FOB (free on board), marking the highest level since 2006.

The report also revealed that this growth was coming from higher value sales, despite volumes of bottled wines being down 5% to 342 million litres, and bulk shipments declining 18% to 395 million litres, representing a 12% drop in bulk value.

Of particular cheer for the Australian industry, which has been pursuing a strategy of growing higher value sales, was that exports of higher value wines – those above A$10 FOB per litre – hit a record high of A$1.1bn.

Exports of wine above A$10 FOB per litre have more than tripled since 2014, with wines at A$30 and over performing particularly strongly, albeit from a smaller volume base.

“Australian wine companies have been very active in our export markets and the value of exports has now increased for six consecutive years,” said Wine Australia chief executive officer Andreas Clark.

On the fall in volume, Clark cited the smaller 2018 and 2019 vintages, and the resulting lower inventory levels, as the main factors behind the volume decline.

The report also said that the higher fall in bulk volumes came in the face of increasing volumes from competitor countries.

Organisation Internationale de la Vigne et du Vin (OIV) figures quoted showed the rise in global production, increasing by 4.4 billion litres in 2018, with France, Italy, Spain and China all pumping more wine onto the market.

Australia’s runaway success in China cooled in volume terms, dipping by 17%, but rose 12% to A$1.28bn in value, consolidating its number one position ahead of France, claiming a 35% share of the imported wine market against France’s 29%.

However, Clark sounded a note of caution regarding 2020, saying: “Looking ahead [this year], we anticipate that coronavirus will have an impact on sales, particularly to China, but at this stage it is difficult to predict the degree of that impact”.

The impact of Australia's horrendous bush fires also remains to be seen. 

The top five destinations for Australian wine by value in the year to December 2019 were:

1. China (including Hong Kong and Macau), up 12% to A$1.28bn

2. USA, down 1% to A$419m

3. UK, down 9% to A$352m

4. Canada, down 13% to A$183m

5. Singapore, up 18% to A$105m