Australia’s Wine Grape Crush Rebounds 11%

Australia’s wine industry is showing early signs of recovery after two years of steep production declines, thanks to a rebound in wine grape yields and renewed momentum from China.

According to the latest National Vintage Report released by Wine Australia, the country’s wine grape crush in 2025 rose 11% year-on-year to 1.57 million tonnes, signaling a potential rebalancing of supply and demand in the sector.

The rebound comes as China, once Australia’s largest wine export market, re-emerges as a key growth driver following the removal of punitive tariffs last year. The recovery in exports to China has injected much-needed optimism into an otherwise sluggish global demand environment.

Shiraz Leads the Comeback

Red grape varieties led the rebound, with crush volumes jumping 20%, while white varieties saw a modest 2% increase. Shiraz reclaimed its position as the most crushed variety, surging 23% year-on-year. In contrast, Chardonnay production fell 13%, largely due to frost damage.

South Australia remained the country’s top producing state, accounting for 48% of the national crush—a year-on-year increase of 8% from historically low levels. New South Wales followed with 33% of the total and recorded the largest year-on-year growth at 24%. Victoria, the third-largest wine-producing state, saw a slight decline of 1%, while Western Australia, Tasmania and Queensland all reported increases. Tasmania is on track to set a new record crush for the second consecutive year.

The total estimated value of the 2025 vintage rose 14% to AUD 1.13 billion. However, grape prices varied across regions. In cool and temperate areas, the average purchase price fell 5%, while warm inland regions saw a 2% increase.

“The 2025 crush equates to around 1.1 billion litres of wine, which is in line with current sales of Australian wine on domestic and export markets,” said Peter Bailey, Manager of Market Insights at Wine Australia.

China Drives Export Surge

The rebound in production coincides with a significant uptick in exports to China. In March 2024, China lifted its anti-dumping and countervailing tariffs on Australian wine, ending more than three years of trade restrictions. The move triggered a surge in exports to the Chinese mainland.

For the 12 months ending March 2025, exports to China rose by AUD 1.01 billion to AUD 1.03 billion, according to Wine Australia. China now accounts for 39% of Australia’s total wine export value. This growth helped push global Australian wine exports up 41% to AUD 2.64 billion.

Elsewhere, the picture was less rosy. Exports to markets outside mainland China dropped 13% year-on-year to AUD 1.62 billion, while total export volume fell 9% to 551 million litres—marking the lowest volume in more than two decades.

Still, there are signs that China’s recovery may be uneven. In May 2025, the value of Australian wine imported into China fell 9.38% year-on-year, though import volume rose, suggesting that lower-priced wines dominated customs clearance that month.

Questions Linger About Market Absorption

Industry leaders remain cautious about whether China’s surge in demand can be sustained. Over the past year, producers and regional associations have repeatedly cited structural changes in China’s wine market, including more conservative purchasing behavior and shifting consumer preferences.

The large volume of Australian wine that poured into China in 2024 may not be easily absorbed, raising questions about whether current export volumes are sustainable heading into the second half of 2025.

Despite the recovery in 2025, the crush remains 140,000 tonnes below the 10-year average of 1.78 million tonnes. In 2023, production was 26% below that average, and while the industry has since regained ground, overall output remains historically low.

The data suggests that Australia’s wine sector is gradually embracing a more cautious, demand-driven model—adjusting production to better align with actual market conditions amid growing uncertainty in the global wine trade.