Wine Australia has released figures showing 2016 was a record-breaking year for premium Australian wine export value, climbing 19% to $574m
Export value grew by 7% to $2.22b in 2016 and average value grew by 6% to $2.96 per litre free-on-board (FOB), the highest average value since 2009, according to the Wine Australia Export Report December 2016.
Shares in Treasury Wine Estates - the company leading the boom - rose 3.4% after the report was released on Friday.
Wine Australia CEO Andreas Clark said: "Last year, Australia’s most premium wines took centre stage. Our highest priced wines ($10 or more per litre FOB) achieved record value in 2016, up an impressive 19% to $574m. This increase was driven by demand across all of our major export markets but particularly in the Northeast Asia region.
"In another promising sign that we’re starting to see commercial benefits from an improved perception and increasing demand for our finest wines, the majority of Australian wine exporters (70%) saw value growth in 2016."
Shiraz is the biggest selling wine export for Australia, makes up $513m of the total $2.2b in offshore sales. Cabernet sauvignon is next at $284m, with chardonnay the largest white wine variety at $172m.
China the big money spinner
Exceptional growth to mainland China continued, with the value of exports up 40% to a record $520m.
The jump flies in the face of the Chinese government's anti-graft campaign, with industry insiders saying the measure has been a boon for brands such as Penfolds.
"Rather than drinking the super-expensive French wines, they were turning to Australian wines which were more affordable. Penfolds in comparison is (much cheaper)," wine exporter Greg Corra, managing director of Canberra-based Inland Trading, told Reuters.
TWE is due to outline its first half financial results for 2016-17 on February 14 and analysts are expecting another strong result.
Meanwhile, exports to the US were up by 3% to $458m, driven by a rise in the average value of bottled wine exports, up by 9% to $3.95 per litre FOB. The epicentre of growth is in the Greater New York area (including states New York, New Jersey and Delaware), which has recorded five years of growth with that rate of growth increasing in 2016. In the past year. Exports valued at $10 or more per litre FOB to New York were up by 58% to $9.5million, while the rate of growth in this price segment was 23% for all of the US to $41m.
The Brexit vote and subsequent British pound slide have lead to the fall in the value of Australia's wine exports to the United Kingdom, while shipments to Hong Kong dropped as exporters re-routed stock directly to mainland China, where tariffs have been lowered under the China-Australia Free Trade Agreement.
Australia’s top five export markets by value
Mainland China – $520 million ▲40%US – $458 million ▲3%
UK – $355 million ▼5%
Canada – $193 million ▼0.2%
Hong Kong – $110 million ▼16%.
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