Australian wine exports set to rise as global production plummets

As experts predict global wine production in 2017 to fall to its lowest level since 1961, Australia's output is expected to rise.

According to the International Organisation of Vine (OIV) estimated world production is expected to fall to 246.7 million hectolitres in 2017, down 8% from 2016, due to harsh weather in Western Europe, which damaged vineyards in the world’s largest production areas.

Meanwhile Australia’s production is expected to rise 6% to 13.9 million hectolitres. To put this into perspective, one hectoliter represents 100 liters, or the equivalent of just over 133 standard 75 wine bottles.

“In the European Union, extreme weather events – from frost to drought – significantly impacted 2017 wine production, which was historically low,” said the OIV report.

The global decline is set to affect the world’s top three producers - Italy, France and Spain - immensely, with the OIV predictions, which exclude juice and must (new wine), claiming Italian wine production will be down 23% at 39.3 million hectolitres, French output will be down 19% at 36.7 million and Spanish production will be down 15% at 33.5 million.

In France, the weather has affected most of the main growing regions including Bordeaux and Champagne, and the government has projected production will sink to its lowest in decades.

Cellar master Gilles Descôtes told Drinks Business this year’s harvest in Champagne was the shortest in Bollinger’s history and the hardest he has faced.

He said rot had forced “some suppliers of Bollinger to leave more than 50% of the grapes on the ground.”

Damaged European vineyards means more wine exports for Australia

While the fall in production could mean wine price inflation for imported European wine in Australia, it's expected our exports will flourish.

Rabobank’s Agribusiness Monthly reported that the Aussie export market is set to boom in light of the harsh Western European weather conditions.

"Amid a tightening market, Australia is in the enviable position of having an increase in production this year," the report notes.

According to Canstar, the Aussie wine industry is heavily export focused, and a decline in global wine production should see the value of Australian wine exports rise by 5% to $2.5 billion.

This growth will also be driven by continually increasing demand from China and Hong Kong.