In the 12 months ended September 2020, the value of Australian wine exports increased by 4 per cent to $2.998 billion while volume declined by 0.4 per cent to 771 million litres (85.7 million cases). The average value of exports increased by 4 per cent to $3.89 per litre.
Value is at the highest level since exports hit the $3 billion mark in the second half of calendar year 2007. The growth in value was predominantly driven by growth in exports to the United Kingdom (UK) and mainland China. And the growth has been particularly strong in the last quarter of the 12-month period (see Figure 1). In July to September 2020, the value of exports increased by 23 per cent compared to the same period in 2019. This comes after declines of 4 per cent in the April to June quarter and 7 per cent in the January to March quarter.
Figure 1: Value of exports by quarter (A$ million FOB)
Exports in glass bottles increased by 2 per cent in value to $2.4 billion and decreased by 3 per cent in volume to 336 million litres (37 million 9-litre case equivalents). This translated to 5 per cent increase in the average value of bottled exports to an equal record $7.14 per litre (also achieved in the 12 months ended April 2020). This rise in average value is due to an increase in exports at high end of the price spectrum (see price segment section below).
Unpackaged wine exports increased by 13 per cent in value to $576 million and 2 per cent in volume to 427 million litres (47 million 9-litre case equivalents). The average value of unpackaged wine exports increased by 10 per cent to $1.35 per litre. The average value of unpackaged exports has remained high, at levels not seen since late 2004, due to the relative short supply of Australian wine in an already constrained global supply situation (see Figure 2).
The average value of unpackaged wine exports has grown consistently year-on-year since mid-2017, while packaged exports have largely been in growth since early 2011.
Figure 2: Average value per litre, packaged vs unpackaged exports
There was growth in most price segments, but the growth was particularly strong at the low and high ends. This is consistent with trends in major wine markets around the world throughout the COVID-19 pandemic, with growth in premium wines continuing but also a resurgence in commercial and value wines.
Figure 3: Total exports by price segment ($ million FOB)
Exports below $2.50 per litre increased by 8 per cent, driven by growth in unpackaged exports to the UK and other European destinations such as Germany and Denmark. There was also solid growth at $5.00 to $7.50 per litre.
The strongest growth came at the high-end. Exports at $50 or more per litre increased by 34 per cent in value to $438 million.
The overall $10 or more segment increased by 4 per cent to $1.09 billion.
Looking at the top four markets below provides more detail on which markets are driving the trends at each end of the price spectrum. Exports to China above $10 per litre grew by 11 per cent during the year, while exports to the UK below $2.50 per litre grew by 22 per cent. Meanwhile, the growth in the United States of America (USA) and Canada is driven by exports in middle price tiers.
Figure 4: Change in value of exports by price segment in top 4 markets
In the 12 months ended September 2020, Australian exporters shipped wine to 117 destinations (down from 123 destinations in the same period in 2019).
The most significant growth came in exports to Europe, up 16 per cent to $678 million and over-taking North America in value terms for the first time since 2011. Most other major regions also recorded value growth:
- North East Asia, by 1 per cent to $1.4 billion
- North America, by 2 per cent to $636 million, and
- Oceania, by 5 per cent to $111 million.
Figure 5: Change in value of exports by region
The top five destinations by value all recorded growth. They were:
- Mainland China, up 4 per cent to $1.2 billion
- USA, up 1 per cent to $439 million
- UK, up 18 per cent to $430 million
- Canada, up 4 per cent to $196 million, and
- New Zealand, up 9 per cent to $103 million.
New Zealand is back in the top 5 markets by value for the first time since 2011. Singapore dropped one place to sixth after the value of exports declined by 1 per cent.
The top five destinations by volume were:
- UK, up 10 per cent to 256 million litres
- USA, down 4 per cent to 141 million litres
- Mainland China, down 12 per cent to 123 million litres
- Canada, down 7 per cent to 56 million litres, and
- Germany, up 7 per cent to 35 million litres.