Global slowdown presses Australian wine exports below average

Australian wine exports declined in 2023, falling significantly below long-term averages due to a slowdown in Europe and North America amid softening global wine demand and lukewarm sales, according to the latest report by Wine Australia.

Australia’s overall wine exports dropped by 2% in value to AU$1.90 billion and 3% in volume to 607 million litres in the 12 months to December 2023, well below long-term averages.

Wine Australia Manager, Market Insights, Peter Bailey said that Europe and North America drove the reduction in Australia’s export value over the year, declining by 7% and 12% respectively.

“In Europe, exports to the top 15 markets declined in value as the region suffers through higher inflation rates than North America and Asia, as well as supply chain issues. This includes the United Kingdom (UK), Australia’s largest export market by volume. Pleasingly, Australia’s exports to the UK grew in volume for the first time since mid-2021,” Bailey said.

Exports to the US, its biggest market by value, dropped by 7% during the year to AU$364 million, while exports to Canada plunged by 24% to AU$143 million.

The decline in Australia’s exports comes at a time when most wine producing countries are reporting decreasing sales. The global alcohol market is softening and impacting the entire wine category, especially in mature markets. This trend has been attributed to a combination of global economic tightening resulting in less discretionary spending and consumers being more conscious of their health.

IWSR research conducted in the first half of 2023 indicated a “significant negative shift” in spending on all alcohol, with all regions except Asia trending negative. Consumers cited “economic moderation” as the main reason. Furthermore, 2023 was the worst performance for the alcohol market in the United States since 1991, declining by 5 per cent in total servings according to research by bw166.

Conversely in Asia, markets led by Hong Kong registered robust growth for Australian wine. During the year, the country’s exports to Hong Kong jumped by 74% to AU$290 million, in large part thanks to warming relations with China and high anticipation of China lifting up to 218% anti-dumping tariffs on Australian wine.

Singapore, a growing market for Australian wine, ranks as Australia’s fifth largest export market by value with AU$133 million worth of exports.

“Hong Kong and Singapore were stand out destinations for Australian wine in Asia, driving the growth of value to the region. Further, the number of exporters to Hong Kong also grew – up 138 export businesses to a total of 531 in 2023. Hong Kong and Singapore are key trading hubs in the Asian region and, as such, some of the wine is on-shipped to other markets,” Bailey said.