Wine Australia has revealed the average value of Australian wine exports in 2019-20 grew to $3.89 per litre, the highest level since 2004–05.
While all price segments below $15 per litre declined in value, this was partially offset by strong growth in exports at $50 or more per litre. Meanwhile, exports $10 per litre and above grew by 5% to $1.04 billion.
However, the total value of exports decreased by 1% in value during 2019-20 to $2.84 billion, as a result of measures to contain COVID-19.
Wine Australia Chief Executive Officer Andreas Clark said exports during the first two quarters of the year were following the growth trajectory of previous years, but they fell in the latter two quarters as the restrictions hit economies worldwide.
"The advent of the COVID-19 pandemic has resulted in unprecedented disruption to wine markets around the world with the closure of restaurants, cafes and bars," Clark said.
"While the first two quarters of 2019–20 showed increases in exports, in the third quarter ending March 2020, exports declined 7% in value on the comparable quarter in the previous year, while the fourth quarter was slightly stronger with a decline in exports of 4% in value."
Clark said there remained considerable uncertainty surrounding the extent, duration and impact of the COVID-19 pandemic in health and economic terms. However, there were some clear trends emerging in key markets in relation to wine sales.
"Overall, demand for wine and wine consumption has held up in most markets around the world," he said.
"The biggest impact has been on how consumers have purchased wine, with the shutdown of the on-premise channel [cafés, restaurants and hotels] and a shift to purchasing more wine online.
"In the off-trade channel [retail liquor sales], there has been growth across all price points, with the trend to premium and fine wine continuing however, the trend for declining commercial/value sales has reversed, with people gravitating to known brands and everyday rather than occasion wines."
Smallest vintage in a decade
The growth in average value was driven by declines in export volumes, which decreased by 9% to 730 million litres (81 million 9-litre case equivalents), the decline led by wine exports in the lower price segments. The decline in volume is result of less wine being available for export given the lower vintages of 2018, 2019 and 2020.
Clark said that, as the 2020 vintage was the smallest Australia had experienced in a decade, the decline in export volumes was principally driven by supply shortage rather than softening demand.
Australia's top export destinations
In the past year, Australian exporters shipped wine to 116 destinations. Exports increased in value to Europe (by 3% to $615 million) and South East Asia (by 0.3% to $181 million).
The value of wine exports to Europe was the highest since 2011–12, while shipments to South East Asia represent a financial-year record. The United Kingdom, Germany and Scandinavia drove growth to Europe, while Singapore and Indonesia were the key drivers behind the growth to South East Asia.
The top five destinations by value
- Mainland China - up 0.7% to $1.1 billion
- United States - down 0.4% to $430 million
- United Kingdom - up 3% to $383 million
- Canada - down 6% to $186 million
- Singapore - up 13% to $98 million
Australia takes further share from France
Despite the recent decline in value, Australia remains the number one imported wine category in mainland China and has performed better than its key competitors in the last year.
Import data from the Global Trade Atlas shows that Australia held a 37% share of the value of wine imported by mainland China in the 12 months ended May 2020, well ahead of France on 27%, Chile with 13% and Italy with 6%. While Australian exports increased, French imports fell by 36%, Chile by 26% and Italy by 12%.
In 2019–20, the value of exports to the US declined by 0.4% to $430 million and volume declined by 10% to 137 million litres (15 million 9-litre case equivalents). The average value increased by 11% to $3.13 per litre FOB.
COVID-19 and restrictions on hospitality venues and the growth in retail sales appear to have assisted Australian wine sales with the value of exports stabilising in the third quarter before increasing by 14% in the fourth quarter.
In 2019–20, Australian wine exports to the UK increased by 3% in value to $383 million, despite a 2% reduction in volume to 232 million litres (26 million 9-litre case equivalents). Average value increased by 5% to $1.65 per litre FOB.
There was growth at both low and higher price points.
Pictured main: Makers' Project, Wolf Blass
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