Pandemic dents but can’t stop Aussie wine exports

The latest figures from Wine Australia show that wine exports have held steady so far despite taking a sharp knock in the second half of the 2019-2020 financial year.

Winemaking in Barossa (image: Wines of Australia)

Overall, the average value of wine exports grew to A$3.89 per litre – the highest value level since 2004-05.

On the other hand, the total value of exports dipped by 1% to A$2.8 billion, “as a result of measures to contain Covid-19”, the trade body said in a statement.

Growth remained strong in the first two quarters of the period in question, in fact even showing improvements on the previous financial year but exports showed a sharp drop off in the second half of the year.

By the end of the third quarter ending March 2020 for example, exports declined 7% in value compared to the previous year and while they bounced back in the fourth quarter to the end of June, the results were still 4% below FY2019’s fourth quarter results.

CEO Andreas Clark said that 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”.

Although he said that “overall” demand for wine and wine consumption had continued to be positive in export markets: “The biggest impact has been on how consumers have purchased wine, with the shutdown of the on-premise channel and a shift to purchasing more wine online.

“In the off-trade channel, 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.”

The volume of wine being shipped also declined, although this is also a result of the smaller harvests Australia has experienced over the course of 2018, 2019 and 2020, with the latter being the smallest for a decade. Overall volume exports declined 9% to 730m litres.

Australia continues to enjoy a thriving export business, with wine being shipped to 116 countries. Within the various ups and downs, exports by value to Europe increased 3% over the past year, the highest level since 2011-12, principally driven by the UK, Germany and Scandinavia.

In South-East Asia meanwhile there was also a small uptick in exports by value, with Singapore and Indonesia being key drivers.

The biggest markets by value remain:

Mainland China (up 0.7% to A$1.1bn)

US (down 0.4% to A$430m)

UK (up 3% to A$383m)

Canada (up 6% to A$186m)

Singapore (up 13% to A$98m)