According to the latest data released by Wine Australia, Australian wine exports slumped 10% in value to AU$1.87 billion over the 12 months ending in June amid weakened consumer demand observed in mature markets, particularly in the US.
The reduction in export value was mainly driven by a decrease in shipments to the US, with lower-priced packaged exports continuing to decline. Additionally, exports to the UK also saw a decline, following two years of elevated shipments driven by pre-Brexit demand and COVID-19 related market impacts.
Peter Bailey, the Manager of Market Insights at Wine Australia, stated that more than half of the decline in export value occurred in shipments with an average value ranging from AU$2.50 to $4.99 per liter free on board (FOB). These are typically wines sold in lower priced retail segments and were impacted by the shrinking wine consumption in mature markets, leading to challenges in Australia’s export performance, particularly in the US.
In the higher price segments above AU$5 per liter, export volume declined by 14%, and the value dropped by 9%. This decline was primarily driven by markets like Singapore, the US, Canada, and the UK, although growth in Hong Kong partially offset some of the losses.
Europe and North America both experienced declines in wine exports during the year. Europe‘s exports decreased by 15% to AU$556 million, mainly influenced by the UK, while 12 of the top 13 destinations in the region also saw a decline in export value. North America‘s exports dropped by 14% to $AU525 million. Exports to Asia also saw a 4% decline, reaching AU$637 million, with varying results across the Asian region, including declining exports to Singapore and increasing exports to Hong Kong – two key trading hubs reflecting the unpredictable market conditions.
It’s worthy to note that among the top five markets by value, all reported drops except Hong Kong, which grew by 29% to AU$220 million during the year.
The UK saw a 14% decrease to AU$364 million; the US experienced an 18% decline to AU$359 million, and Canada witnessed a 6% decline to AU$163 million. Singapore faced a 24% decrease to AU$128 million.