Australian wine exports to its most valuable market China has reached all time high in terms of value in the 12 months ended in June, despite a 16% drop in volume, according to the latest figures released by Wine Australia.
Australian wine exports to China including Hong Kong and Macau had reached a financial year record, increasing 7% in value to AU$1.2 billion, said Wine Australia CEO Andreas Clark.
Volume, however, decreased 16% to 154 million litres (17 million 9-litre case equivalents) as exports of wines below AU$2.50 per litre FOB declined, confirming a premiumnisation trend.
As previously exclusively reported by vino-joy.com, Australia in the first five months of the year has overtaken France to become the number one imported wine category in mainland China by value.
Tailing only behind Chile in terms of volume, Australia is expected to maintain its lead over France in China.
Overall in the 12 months ended in June this year, the value of Australian wine exports has continued to grow, increasing by 4% in value to AU$2.86 billion, driven by China and a recovering US market.
Exports to the US grew by 2% in value to AU$432 million. Average value increasing 6% to AU$2.83 per litre, the first growth in 2 years, says the trade body.
Export volumes decreased by 6% to 801 million litres (89 million 9 litre case equivalents); this volume decline was driven by a decrease of 7% in shipments of wine below an average value of AU$2.50 per litre free on board (*FOB). This resulted in a 10% increase in the overall average value of exported wine to AU$3.58 per litre, “the highest level since 2009”, according to the trade organisation.
Wine Australia CEO Andreas Clark said the growth in value and the declines in volume at that lower end of the price spectrum would be welcome news to the sector that has been focusing strongly on growing value rather than volume.
“The strong growth in average value is positive for the wine sector and the broader economy as it lifts returns for wine businesses and flows through to regional economies through higher grape prices. Our National Vintage Report 2019 released last week shows that the average grape price has lifted for the fifth year in a row, reaching $664 per tonne, the highest level since 2008″, Clark said.
Exports to the UK market had experienced a slight decline with value decreasing 3% to AU$373 million and volume declining 4% to 236 million litres (26 million 9-litre case equivalents).
The volume decline was attributed by the trade organisation to the fact that some of the larger brands have wrapped up their strategies of getting additional product into market pre-Brexit to mitigate any disruption to exports.
“It’s important to retain perspective on the UK market. Research by IRI shows Australia was ranked number 1 in still wine off trade [retail] sales in the 12 months ended March 2019, with a market share of 24% in volume and 23% in value’, Clark said.
In other parts of Asia, Australian wine exports to Singapore stayed the same compared with the same period last year at AU$87 million, while exports to Japan decreased 4% in value to AU$51 million.