It was another ‘tough year’ for Australian wine exporters as rising inflation, business costs, and interest rates impacted margins, and are anticipated to continue for the rest of the year.
Wine Australia’s latest export report reveals that wine exports increased by one per cent in volume to 623 million litres – however, in value terms, they declined by four per cent to $1.94 billion.
The rise in volume relative to value was said to be driven by growth in unpackaged wine shipments to the US and Canada as global shipping challenges improved.
Peter Bailey, market insights manager at Wine Australia, said the increase in unpackaged wine exports is a sign of improvement to the shipping schedules in select markets, which have been a factor since 2021.
“It was pleasing to see positive signs of improvements emerging in shipping conditions in some markets, noting delays are still being reported along certain trade routes,” said Bailey.
However, he said decreased shipments to the UK during the second half of last year were greater than the increase in overall value to other markets.
“This drop was anticipated, as Australia experienced two years of elevated shipments due to Brexit deadlines and increased demand for wine in the off-trade (supermarkets and bottle shops) during the COVID-19 pandemic when many on-trade businesses were closed,” Bailey explained.
The decline in the overall value of exports was driven by shipments valued below $5 per litre free-on-board (FOB), which declined by nine per cent to $988 million.
Exports in this segment declined in value in several markets – including the US, UK, Denmark, Germany, the Netherlands, and New Zealand.
Meanwhile, exports above $5 per litre increased by 2 per cent in value to $957 million. The markets driving this trend were Canada, Thailand, Malaysia, Denmark and Japan.
Growth in these markets was partially offset by a decline in exports in this price segment to Singapore, Hong Kong, and the UK.
“Increases in the value of exports to Thailand, Malaysia, and Canada offset declines in value to Singapore, Hong Kong, and the US,” Bailey remarked.
The top five markets by value were:
- US (down 3 per cent to $390 million; 20 per cent share of exports by value).
- UK (down 18 per cent to $373 million; 19 per cent share).
- Canada (up 14 per cent to $188 million; 10 per cent share).
- Hong Kong (down 13 per cent to $167 million; 9 per cent share).
- Singapore (down 20 per cent to $132 million; 7 per cent share).
The top five markets by volume were:
- UK (down 11 per cent to 216 million litres; 35 per cent share of total export volume).
- US (up 13 per cent to 140 million litres; 23 per cent share).
- Canada (up 46 per cent to 68 million litres; 11 per cent share).
- Germany (down 15 per cent to 29 million litres; 5 per cent share).
- New Zealand (down 6 per cent to 29 million litres; 5 per cent share).
This story first appeared on our sister publication Inside FMCG
