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Australia wine exports to China up 7% in value but down 14% in volume

Australian wine export value to its most profitable market China continues to rise in the 12 months ended in March 2019 despite a 14% drop in volume.

Australian wine export value to its most profitable market China continues to rise in the 12 months ended in March 2019 despite a 14% drop in volume.

The country, currently the second biggest wine supplier to China, exported AU$1.11 billion worth of wines to China including Hong Kong and Macau, up by 7%, according to the latest figures released by Wine Australia.

Its volume however slumped by 14% to 154 million litres (17 million 9-litre case equivalents). The drop was nonetheless compensated with increases in average price.

The volume decline in the China market is confined almost exclusively to exports in the below $2.50 per litre value segment, reflecting both a tightening of Australian supply in this segment and also the increased supply availability from competitors such as Chile, according to the wine trade organization.

The Global Trade Atlas figures showed that in the year ended February 2019, Australia had a 29% share of the imported wine market – up from 26% a year ago.

The growth is encouraging, as just previously reported by Vino-joy.com that China’s wine imports in the first three months of 2019 dipped by 20.19% to US$782 million.

Meanwhile, Australia’s wine giant Treasury Wine Estates, owner of Penfolds and Wolf Blass, took what was described by Financial Review as “unusual” move to reinforce TWE’s confidence in the Chinese market, because of the overall volume dip.

The company told investors that they should not use the Wine Australia export data released every three months as a proxy for TWE’s trading performance, the Australian newspaper reported.

Other markets

During the period, the total value of Australian wine exports increased by 5% to AU$2.78 billion in the 12 months to March 2019, with the average value per litre climbing to AU$3.41, “the highest level since 2009,” according to Wine Australia.

While the volume of exports had declined slightly by 3% to 814 million litres (90 million 9-litre case equivalents), the increasing value overall and on average was overwhelmingly positive, says Wine Australia CEO Andreas Clark.

‘What we are seeing is a drop in volumes in the lower value categories and this places Australia well as the global consumer premiumises and drinks less but more expensive wines’, Clark said.

Nearly all destinations imported more Australian wine in the year ended March 2019 than the previous period. North America is still the exception, with excellent growth in exports to Canada unable to outweigh the decline in exports to the US.

Exports to the US, Australia’s second most valuable market, dropped by 3% to AU$424 million in value, and another 7% in volume to 17 million litres.

The UK still remains Australia’s biggest market by volume at 26.8 million litres.

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