Premium Australian wine exports to Canada continue to grow

In a sign of growing demand for Australian wines at premium price points, exports to Canada A$10 and more per litre free-on-board (FOB) grew 9 per cent in the 12 months to September 2016, with the strongest growth recorded between $10 and $19.99, according to Wine Australia’s latest Export Report, released today.

For the period, total Australian wine exports to Canada increased by 1 per cent in value to C$191 million (A$190 million) and declined by 3 per cent in volume to 63 million litres.

Wines priced A$10 and over per litre FOB segment increased by 9 per cent to C$25.1 million (A$25 million), with growth in the A$10.00–14.99 price segment seeing double-digit growth, up 12 per cent to C$18.1 million (A$18 million), and A$15.00–19.99 up 11 per cent to C$3.01 million (A$3 million). The average value of bottled exports grew by 5 per cent to C$5.66 (A$5.63) per litre FOB, continuing its steady growth over several years. The average value of bottled exports is now at its highest level since January 2009.

There was growth across most price segments:

• A$2.49 and under per litre FOB increased by 2 per cent to C$28.1 million (A$28 million)
• A$2.50–5.00 per litre FOB segment declined by 11 per cent to C$53.3 million (A$53 million)
• A$5.00–7.49 per litre FOB increased by 7 per cent to C$60.3 million (A$60 million)
• A$7.50–9.99 per litre FOB increased by 6 per cent to C$25.1 million (A$25 million), and
• A$10 and above per litre FOB increased by 9 per cent to C$25.1 million (A$25 million).

Red wine accounted for 66 per cent of the value of exports to Canada, ahead of white wine with 31 per cent and other wines with 3 per cent. While red wine exports declined by 2 per cent to C$125.6 million
(A$125 million), white wine exports grew, up by 6 per cent to C$60.3 million (A$60 million).

Aaron Ridgway, Wine Australia Head of Market, Americas said, ‘Canadian wine drinkers are increasingly looking to Australia for quality at price points well above the value segment. When compared with what’s available from around the world at a premium, Australian wine is more competitive than ever.’

Global exports

Exports to mainland China grew by 51 per cent to C$476.3 million (A$474 million), making it Australia’s number one export market by value for the first time. To put this in context, just a decade ago, Australian wine exports to China were valued at C$27.1 million (A$27 million).

Contributing to the exceptional growth are the trade benefits of the China–Australia Free Trade Agreement and the growing Chinese middle class’ increased interest in wine, with average consumption frequency of imported wine and the number of imported wine drinkers both on the rise.

More than a third of Australian wine exports priced A$10 and more per litre FOB were destined for China, valued at C$191 million (A$190 million) and up by 63 per cent.

Australia’s top five export markets by value

• Mainland China – C$476 million (A$474 million) ▲51%
• US – C$450 million (A$448 million) ▲4%
• UK – C$363 million (A$361 million) ▼3%
• Canada – C$191 million (A$190 million) ▲1%
• Hong Kong – C$127 million (A$126 million) ▲7%.

*Free on board (FOB) - ‘Free on board' value of the wine, where the point of valuation is where goods are placed on board the international carrier, at the border of the exporting country. The FOB value includes production and other costs up until placement on the international carrier but excludes international insurance and transport costs.

A$ – Australian dollar
C$ - Canadian dollar