WINE Australia’s latest figures show total Australian wine exports have soared 41 per cent – in value – to $2.6 billion.
But how good is the good news for the embattled wine industry?
The Chinese – in the first full 12 months since its crippling tariffs were lifted – has seen it resume a market dominant position.
However, at the same time, sales in both value and volume to literally the rest of the world dropped badly.
All figures which will have an impact throughout the Murray Valley wine industry.
Wine Australia said in the 12 months ending in March, saw 96 million litres of exports to China, valued at $1.03 billion.
Yet while mainland China now represents 39 per cent of total export value, it only accounts for 15 per cent of volume.
Wine Australia marketing general manager Paul Turale said the market is in a state of VUCA.
Which he explained stands for Volatility, Uncertainty, Complexity and Ambiguity.
“They are all apt descriptors of the world currently, and a drag on markets globally,” Mr Turale said.
“Despite very positive headline export results driven by an exceptional full year’s trading back with China, stubbornly high global stock levels, coupled with increasing economic uncertainty, continues to negatively impact trade and consumer sentiment and is evident with continued softening of exports to other established and emerging markets around the world.
“As we all try to navigate and adapt to the unknown, risk mitigation is paramount.
“In the world of wine, that means a strategy based on delivering market diversification, playing to our relative strengths, and capitalising on opportunities as they present.
“Despite the uncertainty around tariffs on goods imported into the US and the anticipated flow on effects to other markets, currency is working in Australia’s favour for wine exporters, so we continue to look for positives and opportunities in these VUCA times.”
Australian wine is currently subject to a 10 per cent US tariff and the industry peak body conceded “there is still a lot of uncertainty about what the longer-term position might be”.
Wine Australia said there continues to be uncertainty around a number of factors including “how much of the increased cost will get passed on to consumers, the effect of a global trade war on foreign exchange rates, and whether consumers will start to switch to domestic wines”.
All of these factors make it “hard to predict how this will affect Australian wine exports to the US in the short-to-medium term”.
