Australian wine exports hit record high in both volume and value in 2017

Australia wine exports have hit record high in both value and volume in 2017, fuelled by bullish demand from mainland China and an increase in higher-end wine sales, according to the latest report by Wine Australia.

Photo source: Wine Australia

Australia’s wine exports soared to AU$2.56 billion, a 15% increase in value, making it the highest annual growth rate since 2004. Meanwhile, in terms of volume, it’s also a record-breaking year with 811 million litres shipped, representing an 8% growth.

Wine Australia CEO, Andreas Clark, said the upward trend continued with a 7% increase in average value per litre free on board (FOB*) to AU$3.16, the highest level since 2009.

“Growing demand for premium Australian wine, particularly in Northeast Asia, increased the value of bottled wine exports by 17% to AU$2.1 billion, while the average price per litre for bottled wine grew by 3% to a record AU$5.63”, said Clark.

Similarly, bulk wine exports also experienced price increases, with total value increasing by 10% to AU$440 million and average value per litre increasing by 6% to AU$1.03, the highest average value since 2012.

Among all countries, mainland China has been the single most important driver for Australia’s wine boom, thanks to the two countries’ Free Trade Agreement on import tariff reduction.

Export value to the mainland soared 63% to AU$848 million, accounting for 33% of Australia’s total export value last year, and its volume also increased by 54% to 153 million litres.

Notably, it added that “there was growth in exports to mainland China across all price points, from entry level/commercial wines through to Australia’s finest wines”.

However, exports to another of its important markets, North America, decreased slightly by 2% to AU$636 million. High-end value wine exports to the US nonetheless saw some growth with wines valued at AU$10 per litre or more increased by 8% to AU$45 million, it noted.

The growth in premium wine exports to the US is also evident in retail figures. Off-trade sales figures from sector analyst IRI showed at US$11 or more per bottle, Australian sales grew by 32% while the total sales in this segment increased by 7% in the year ended September 2017.

In terms of volume, the UK still ranks as Australia’s biggest volume importer, responsible for 28% of its total export volume, followed by the US, mainland China, Canada, and Germany.