Australian wine exports on the rise
The value of Australian wine exports has increased for the first time since the global financial crisis hit hard in 2007, the Australian Grape and Wine Authority (AGWA) revealed today.
The authority’s Wine Export Approval Report for December 2014 shows that the total volume of Australian wine exported over the past 12 months increased by 1.9 per cent to 700 million litres.
Total value increased by the same rate to $1.82 billion.
In contrast to 2013, the majority of exporters recorded a growth in volume.
AGWA said the increase in volume was helped by the depreciating Australian dollar, however a “huge Spanish crush” in 2013 had placed downward pressure on bulk wine prices.
As a result, the bulk wine price dropped by 2 per cent to just $0.99 per litre. The volume of bulk wine exported increased by 8 per cent to 402 million litres.
AGWA acting chief executive Andreas Clark said the strongest growth for Australian exporters was at the premium end of the market.
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“It’s encouraging to see the value of Australian wine exports in positive growth for the first time since 2007 and increasing demand for our premium wines was a major contributing factor to that growth,” Clark said.
“We’ve seen rises in wine exports in all premium price segments: the A$7.50-$9.99 price segment increased by 5 per cent to 15 million litres and by 15 per cent in the A$10.00 and above segment to 17 million litres.
“The ultra-premium above A$50 segment grew 55 per cent, hitting a record A$107 million. While the segment only accounts for 0.8 per cent of the total volume, it contributes 8 per cent of the total value of bottled exports.”
Wine exports in the above A$10 segment were at A$356 million – just below the record high of A$371 million set in September 2007.
KEY MARKET DATA
UK and Europe
The UK remains Australia’s biggest export market by volume dominated by bulk wine exports that are destined for Europe. Total volume increased by 4.5 per cent to 249 million litres.
In 2014, Australian wine exports to Europe increased by 4 per cent to 361 million litres valued at A$581 million. This increase was driven by bulk wine exports, up 8 per cent to 294 million litres, while bottled wine exports declined by 11 per cent to 67 million litres. Despite this decline, the average value of bottled wine exports increased by 6 per cent to A$4.25 per litre.
United States
Two consecutive record domestic harvests have reduced the demand for imported wine in the US. Total Australian wine exports declined by 9 per cent to 164 million litres valued at A$423 million. The decline in exports was mostly seen in the lower price segments, a reflection of the large US harvests.
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Bulk wine exports declined by 9 per cent to 54 million litres and bottled wine exports under A$2.50 per litre declined by 79 per cent to 3.1 million litres.
However growth continued in the higher priced segments for the third consecutive year. The US emergence from recession and more buoyant stock markets mean wine consumers may have greater purchasing power to spend more on premium wines, a category that was hit hard during the recession. Exports above A$10 per litre increased by 3 per cent to 1.6 million litres while exports in the A$7.50-$10 segment also increased by 3 per cent to 2.6 million litres.
Canada
With a relatively small domestic wine industry, Canada relies heavily on imported wines and Australia was a major source of bulk wine for the market increasing by 48 per cent to 31 million litres during 2014.
However the average value of Australian bulk wine declined by 8 per cent to A$0.82 per litre, likely to be the result of price competition with European and US producers.
Bottle exports weakened down 3 per cent to 30 million litres but average value rose by 2 per cent to A$5.22 per litres.
Asia
The austerity measures introduced by the Chinese Government in late 2012 have had the biggest impact on the Chinese imported wine market over the last two years. In 2014 however, total Australian wine exports increased by 8 per cent to 40 million litres valued at A$224 million. In volume terms, bottled exports have almost recovered to the levels recorded before the full effects of the austerity measures took hold.
The A$2.50-$5 segment was the key driver of the turnaround increasing 15 per cent to 20 million litres.
More than 90 per cent of Australia’s ultra-premium wine exports (above A$50 per litre) were exported to Asia and total exports to Asia (excluding China) increased by 7 per cent to 36 million litres valued at A$299 million.
Average value of exports to Hong Kong grew 43 per cent to A$14.57 per litre and exports in the ultra-premium segment grew 127 per cent to A$52 million.
Exports to Singapore rose 37 per cent to A$59 million and exports in the ultra-premium segment grew 123 per cent to A$12 million. Malaysia also performed strongly up 33 per cent to A$35 million with exports in the ultra-premium segment rising 60 per cent to A$10 million.
Source: AGWA Wine and Export Approval Report December 2014
