AUSTRALIAN wine exports dropped by 10 per cent in volume and close to 20 per cent in value over the past 12 months, according to Wine Australia’s latest Export Report.
The decline in volume (to 625 million litres) and value (to $2.08b) was not unexpected, as it was largely the result of the continued impact of the significant reduction in exports to mainland China, driven by high deposit tariffs imposed in November 2020.
This was expected to remain a significant influence on the moving annual total data of Australian wine exports until late 2022.
During the 2021/22 financial year, the operating environment for many Australian wine exporters had been extremely challenging with the significant decline in exports to mainland China, the ongoing impact of the pandemic – including severe shipping delays and increased freight costs – and rising inflation, business costs and interest rates.
International wine sales for Piangil-based Andrew Peace Wines were “simmering away”.
“It has made it a lot harder with the shortage of containers, and ships and not really going into China now (due to Chinese government-imposed tariffs),” sales manager George Dajczer last week told The Guardian.
“In the first quarter of the year, there was $130 million worth of export sales to China, of which $90 million to Hong Kong, in that period of three to four months. But prior to that, it was $1.2 billion, so it’s a massive dent into the wine industry in Australia.
“China represented about 4 per cent of sales for us, which wasn’t ‘ginormous’, but again it was sales that helped us look for opportunities to market and sell the wine.
“There is still a few million litres going to China. Penfolds send in bulk and bottle over there.”
Andrew Peace Wines is exporting to Japan, Korea and into Belgium, UK and other European countries.
“We have small pockets but the frustration is how long it takes the wine to get from Australia to their destination,” Mr Dajczer said.
Wine Australia market insights manager Peter Bailey said that while the total data showed declines, there were some encouraging signs in key and emerging markets.
“When mainland China is excluded from the data, exports increased by 5 per cent in value to $2.06 billion, an increase of $105 million – the highest value since 2009/10,” he said. “This is despite volume declining by 3 per cent to 619 million litres. The value growth for these markets was driven by a 9 per cent increase in average value to $3.32 per litre.
“The key contributors to the value growth included Singapore, the United States, Malaysia, Thailand, India and New Zealand.
“The above $10 or more per litre price segment helped drive overall value growth to the US, which has returned to Australia’s top destination by value, and there was also a significant increase in the number of companies exporting to the US.”
In 2021/22, Australian wine exporters shipped wine to 113 destination markets. At a region-level, the most significant growth came from exports to Southeast Asia, up 51 per cent to $314 million, but also to North America, up 5 per cent to $612 million, and the Middle East, up 48 per cent to $20 million. This growth was offset by a decline in exports to Northeast Asia (including mainland China), down 64 per cent to $328 million, and Europe, down 9 per cent to $658 million.
“Still red wine accounted for 92 per cent of the value of exports at $10 or more per litre,” he said. “This is critical as the reduction in exports to mainland China was predominantly still red wine. Off much smaller bases, still white wine and rosé also grew strongly in this price segment.”**breakout**
The top five markets by value were:
US, up 9 per cent to $436 million
UK, down 10 per cent to $421 million
Canada, down 5 per cent to $174 million
Hong Kong, down 9 per cent to $170 million
Singapore, up 49 per cent to $169 millionThe top five markets by volume were:
UK, down 15 per cent to 227 million litres
US, up 10 per cent to 139 million litres
Canada, up 4 per cent to 53 million litres
New Zealand, up 13 per cent to 32 million litres
Germany, down 11 per cent to 32 million litres
