Australian wine exports down 10 per cent in weak global wine market

July 27, 2023
By Rachel White

According to Wine Australia’s Export Report, Australian wine exports are down 10 per cent in value and one per cent in volume for the year ending June 2023.

Ending with a total value of $1.87 billion, down from $2.01 billion in September 2022, declining exports to the US and UK are partially to blame as packaged exports to the US decreased, while pre-Brexit and COVID-related demands slowed in the UK.

Export volume was comparatively stable as short-term supply-driven increases in unpackaged wine shipments, especially to Canada, were outweighed by declines in volume to many of Australia’s export destinations.

Peter Bailey, Manager of Market Insights at Wine Australia, said more than half the decline in Australia’s export value took place in shipments with an average value between $2.50 to $4.99 per litre free on board (FOB), which are generally wines exported in their final packaging and sold in lower priced retail segments.

“Wine consumption in mature markets is in decline, driven by decreases in the commercial price segments. This is impacting Australia’s export performance, especially in the US, as Australia is very exposed to the price segments in decline,” said Bailey.

These figures reflect global trends, with drinks analysts IWSR reporting global wine consumption had decreased by three per cent in 2022, except for premium wines, which continued to enjoy modest growth.

“According to IWSR, the value of global premium wine sales grew by 2 per cent in 2022, a lower growth rate compared to recent years due to economic and inflationary pressures. Globally, consumers are cutting back on alcohol spending as prices rise for food and other necessities but are choosing to drink less often rather than trade down price segments,” said Bailey.

The report also revealed that exports with an average value below $5 per litre declined by 11 per cent in value but increased by 1 per cent in volume, but exports above $5 per litre declined by 14 per cent in volume and 9 per cent in value.

“The increase in unpackaged exports and the decline in packaged exports has resulted in the share of unpackaged exports growing by 8 percentage points to a 69 per cent volume share. This has an impact on the overall average value of exports, as unpackaged exports do not include packaging costs and are therefore inherently lower in value,” said Bailey.

Australian wine was exported to 117 global destinations during the year, up from 112 in 2022. Sixty-six of these destinations recorded growth in the value of exports during the year, while 51 declined.

Australia’s top five markets by value were:

  • UK (down 14 per cent to $364 million, 20 per cent share of total export value)
  • US (down 18 per cent to $359 million, 19 per cent share of total export value)
  • Hong Kong (up 29 per cent to $220 million, 12 per cent share of total export value)
  • Canada (down 6 per cent to $163 million, 9 per cent share of total export value), and
  • Singapore (down 24 per cent to $128 million, 7 per cent share of total export value)

Australia’s top five markets by volume were:

  • UK (down 3 per cent to 220 million litres, 35 per cent share of total export volume)
  • US (down 3 per cent to 135 million litres, 22 per cent share of total export volume)
  • Canada (up 43 per cent to 77 million litres, 12 per cent share of total export volume)
  • New Zealand (down 3 per cent to 31 million litres, 5 per cent share of total export volume), and
  • Germany (down 12 per cent to 28 million litres, 5 per cent share of total export volume)

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