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Delving into Australian wine’s growth in Québec, Ontario and British Columbia

Market Bulletin | Issue 128
Photo: Adobe Stock
09 Oct 2018
tagged with market bulletin , exports , Canada
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Canada is Australia’s fourth biggest export destination by volume and value, and the latest export figures show some positive outcomes for the Australian grape and wine community. In 2017–18, the volume of Australian exports to Canada increased by 11 per cent to 7.6 million cases and value increased by 7 per cent to $199 million.

Exports grew by value to all ten provinces. More than 80 per cent of Australian wine by value is shipped to three provinces – Québec, British Columbia and Ontario (see Figure 1). British Columbia was the stand-out with volume up by 29 per cent and value by 12 per cent.

Québec, Ontario and British Columbia are also the 3 biggest provincial wine markets in Canada with a combined volume share of 82 per cent.

Figure 1: Australian exports to Canada by province, 201718

Province

Volume (thousand cases[1])

Value (A$M FOB)

Volume growth

Value growth

Volume share

Value share

Québec

2,408

43.8

2.3%

9.1%

31.7%

22.0%

British Columbia

2,245

48.6

29.0%

12.3%

29.5%

24.4%

Ontario

2,199

73.4

10.5%

2.6%

28.9%

36.9%

Nova Scotia

360

9.7

-3.8%

0.3%

4.7%

4.9%

Alberta

294

18.2

-0.8%

4.6%

3.9%

9.2%

Saskatchewan

30

1.4

11.4%

12.9%

0.4%

0.7%

Newfoundland

29

1.7

41.1%

43.9%

0.4%

0.8%

Manitoba

17

1.1

-1.4%

0.1%

0.2%

0.5%

New Brunswick

12

0.6

21.7%

16.0%

0.2%

0.3%

Prince Edward Island

6

0.3

72.2%

75.0%

0.1%

0.2%

Total

7,601

198.7

11.2%

6.7%

100.0%

100.0%

Source: Wine Australia

Québec

Québec is a Government monopoly market, with the sale and distribution of alcohol controlled by the Société des alcools du Québec (SAQ). It is the biggest provincial wine market in Canada with total sales of 18.9 million cases.

In 2017–18, wine sales grew by 5 per cent, driven predominantly by imported wines from France, Italy, Spain and Australia.

Australia is the fourth ranked wine category behind France, Canada, and Italy. Australian exports to Québec increased by 2 per cent in volume and 9 per cent in value in 2017–18.

There was growth in both Australian bottled and unpackaged exports, but the growth was significantly stronger in unpackaged exports (see Figure 2). The average value of bottled exports increased marginally to $5.39 per litre while for unpackaged exports increased by 16 per cent to $1.02.

For bottled exports, the growth is coming in premium wines. Exports at $45 per case or more increased by 14 per cent to $20 million while those below $45 per case declined by 19 per cent to $7 million.

 

Figure 2: Australian exports to Québec by package type

Source: Wine Australia

Exports of red and white wines grew, but the growth was much stronger for whites. Red wine exports increased by 5 per cent to $28 million while whites increased by 18 per cent to $15 million. ‘Dry whites’, Moscato and Pinot Gris/Grigio were the growth categories for whites while ‘dry reds’ and Cabernet Sauvignon were the leading growth categories for reds.

There were 78 Australian companies exporting to Québec during the year, up from 65 the year before. Of the 50 exporters that exported in the previous year, their combined exports increased by 7 per cent to $42 million. There were 15 exporters that ceased exporting and 28 that began.

Ontario

Ontario is also a Government monopoly with the Liquor Control Board of Ontario (LCBO) controlling the sale and distribution of alcohol in Ontario. It is the second biggest provincial wine market in Canada with total sales of 15.8 million cases.

In 2017–18, wine sales grew by 2 per cent with wines from Italy, the United States of America (USA) and Canada the key growth categories. Australia is the fourth ranked category behind Canada, Italy and the USA.

Australian exports to Ontario increased by 11 per cent in volume and 3 per cent in value in 2017–18. While bottled exports accounted for 86 per cent of the value of exports, unpackaged exports drove overall export growth (see Figure 3). Bottled exports declined by 1 per cent to $63 million while unpackaged exports increased by 35 per cent to $9 million. The average value of unpackaged exports increased by 11 per cent to $1.07 per litre while bottled exports declined by 5 per cent to $5.82.

Figure 3: Australian exports to Ontario by package type

Source: Wine Australia

For bottled exports, an increase at the commercial/value end of the market was more than offset by a decline in premium exports. Exports below $45 per case increased by 2 per cent to $17 million while exports of $45 or more per case declined by 2 per cent to $46 million.

White wine was the key growth category for Australian exports to Ontario. White wine exports increased by 15 per cent to $24 million while red exports declined by 3 per cent to $48 million. Pinot Gris/Grigio was the chief driver in the increase white exports, up 68 per cent to $7 million.

There were around double the number of exporters to Ontario compared to Québec, even though volumes to both provinces were similar. This is because a much higher share of unpackaged wine is shipped to Québec by some larger producers. In 2017–18, there were 146 Australian exporters to Ontario, 2 less than the previous year. For the 108 exporters that exported in the previous year, the value of their combined exports increased by 3 per cent to $72 million. There were 41 exporters that ceased exporting and 39 that began.

British Columbia

Like Québec and Ontario, British Columbia (BC) is a Government monopoly market with the sale and distribution of alcohol controlled by the British Columbia Liquor Distribution Branch (BCLDB). BC is the third biggest provincial wine market in Canada with total sales of 8.5 million cases sold.

In 2017–18, sales were flat in BC with growth in wines from Canada and Italy offsetting declines from most other suppliers such as the USA and Argentina.

Australia is the fourth ranked supplier behind Canada, USA and Italy. Australian exports to BC increased by 29 per cent in volume and 12 per cent in value in 2017–18.

Growth in unpackaged exports was the key driver in the overall growth (see Figure 4). Unpackaged exports increased by 60 per cent to $13 million while bottled exports increased by 2 per cent to $35 million. The average value of unpackaged exports increased by 6 per cent to $1.00 per litre while for bottled exports decreased by 2 per cent to $5.02.

Figure 4: Australian exports to British Columbia by package type

Source: Wine Australia

For bottled exports, the growth is coming in premium wines. Exports at $45 per case or more increased by 8 per cent to $21 million while those below $45 per case declined by 5 per cent to $14 million.

Growth in white wine exports was also stronger than reds in BC. White exports grew by 26 per cent to $17 million while reds increased by 6 per cent to $29 million. For whites, Pinot Gris/Grigio was the stand-out, up 75 per cent to $5 million. Other whites to grow included Chardonnay and dry whites. For reds, there was growth in the major varieties and styles. Shiraz exports increased by 4 per cent to $11 million, Cabernet Sauvignon by 15 per cent to $6 million and dry reds by 19 per cent to $5 million.

There were 113 exporters to BC during the year, up from 102 the previous year. For the 79 companies that exported in the previous year, exports increased by a combined 12 per cent to $4 million. There were 22 companies that ceased exporting and 33 that commenced.


[1] 9-litre equivalent cases