Sign Up

Global decline in wine consumption further reduces Australia’s export performance

Market Bulletin | Issue 293
27 Jul 2023
Previous  | Next   News

In the year ended June 2023, Australian wine exports declined by 10 per cent in value to $1.87 billion[1] and 1 per cent in volume to 621 million litres (69 million 9-litre case equivalents). The average value declined by 10 per cent to a 6-year low of $3.00 per litre free on board (FOB)[2]. The total value of exports was 19 per cent below the previous 10-year average of $2.31 billion, while volume was 15 per cent below the previous 10-year average of 733 million litres.

The main driver of the decline in value was exports to the United States of America (US). The US is experiencing structural decline in lower price segments, which is where Australian wine is predominantly sold in this market. The value of Australian wine exports to the United Kingdom (UK) also declined, after two years of elevated shipments due to pre-Brexit demand and COVID-19 induced changes in consumer preferences. While the latest quarter showed signs of this decline easing, additional duties on wine coming into force in August 2023 means that export performance to the UK is unlikely to recover quickly.

The volume of wine exported in the year ended June 2023 was flat compared with the previous 12 months. This was due to a large increase in exports to Canada being outweighed by a decline in the volume of exports to numerous destinations including the UK, mainland China, Germany, the US, Netherlands, and India.

Global wine consumption is in decline, deteriorating by 3 per cent in volume during 2022 according to market research firm IWSR. Premium wine segments (US$10 or more per bottle) grew, while the commercial end (less than US$10 per bottle) of the global market declined – indicating that consumers are still drinking less but choosing to purchase higher price points, although at slightly lower growth rates than recent years. IWSR reports that consumers are cutting back on alcohol spending as prices rise for food and other necessities. Moderation trends are no longer solely driven by health considerations, but also as a money saving strategy – with consumers choosing to drink less volume, rather than trade down in price points.  Ciatti, a bulk wine brokerage, has also reported slowness in wine purchases, both by consumers and bulk wine buyers, even with reduced shipping challenges and freight costs compared to 2021 and 2022.

These trends are evident in Australia’s top markets of the UK and US, where volume consumed in both the commercial and premium ends of the market declined during 2022, with commercial wine in steeper decline. Australia holds about double the market share in commercial segments compared to premium in these two markets and this is impacting export performance. Future impacts on performance will include the reduced crush size of vintage 2023, Australia’s lowest vintage since 2000, which will eventually reduce the amount of wine available for export as these wines move into the market.

Opposing trends by packaging type

In the year ended June 2023, unpackaged exports (products that will be packaged in the destination market) increased by 11 per cent in volume to 426 million litres and declined by 3 per cent in value to $486 million. The decline in value can be attributed to the 12 per cent decline in the average value of unpackaged wine exports to $1.14 per litre FOB, the lowest average value since late 2018, but still 19 per cent higher than the previous low of $0.95 per litre in June 2015 (see Figure 1). The increase in volume is driven by strong growth in unpackaged exports to Canada, the US, and, to a lesser extent, the UK.

Figure 1: Average value per litre over time, unpackaged vs packaged

Exports of packaged products declined by 19 per cent in volume to 195 million litres and 13 per cent in value to $1.38 billion. The average value of packaged exports increased by 8 per cent to $7.09 per litre FOB. The increase in average value of packaged wine is partially driven by a change in the mix of packaged products, as wines priced below $5 per litre FOB declined from a 69 per cent share of packaged exports in 2022 to a 67 per cent share in 2023. This means higher priced products have a larger share of the packaged segment. This mix change is partially due to exporters shipping lower priced wines as unpackaged products for environmental and economic reasons, plus consumers favouring quality over quantity. The average value of packaged exports has grown for several destinations including the US, Hong Kong, UK, New Zealand, Japan, and South Korea.

The increase in unpackaged exports and the decline in packaged exports has resulted in the share of unpackaged exports growing by 8 percentage points to a 69 per cent volume share. This has an impact on the overall average value of exports as unpackaged exports do not include packaging costs and are therefore inherently lower in value.

Performance by price segment impacted by packaging trends

More than half of the $217 million decline in total export value during the year ended June 2023 occurred in the $2.50 to $4.99 per litre price segment (see Figure 2). The markets contributing most to this decline were the US, UK, India, and Canada.

Figure 2: Exports by price segment (million AUD FOB)

Exports below $5 per litre have been impacted by two diverging trends:

  • the rise in unpackaged wine exports as Australian wine producers were able to ease pressure on inventory after the global shipping challenges of 2021 and 2022 caused by the COVID-19 pandemic, and 
  • the decline in packaged shipments as consumers in traditional markets move away from purchasing wine in lower price segments (see Figure 3).

These two factors mean that exports in this price segment declined by 11 per cent in value but increased by 1 per cent in volume.

Exports above $5 per litre declined by 14 per cent in volume and 9 per cent in value. The markets driving the decline in this segment were Singapore, the US, Canada, and the UK – while growth to Hong Kong was able to offset part of this decline. The value of global premium wine sales grew by 2 per cent in 2022, a lower growth rate compared to recent years due to economic and inflationary pressures[3].

Figure 3: Volume by price segment and packaging type


Emerging markets grow in number of exporters

The number of Australian wine exporters increased to 1,221 in the year ended June 2023, up by 4 per cent from 2022, but still far from the peak of 2,814 in 2020. The market which experienced the highest percentage growth in the number of exporters amongst the top markets was Thailand, followed by Vietnam and the Philippines (see Figure 4). Markets which lost the most exporters included the UK, mainland China, South Korea, the US, and Germany. Hong Kong and Singapore are the top two markets by number of exporters but as they are major trading hubs some of this wine is on-shipped to other Asian markets.

Figure 4: Year-on-year change in number of exporters (top 20 markets by number of exporters)

Value decline driven by Europe and North America

In the year ended June 2023, Australian wine was exported to 117 global destinations, up from 112 in 2022. Sixty-six of these destinations recorded growth in the value of exports during the year, while 51 declined. Exports to Europe and North America both declined during the year. Europe declined by 15 per cent to $556 million, driven mostly by the UK, but 12 of the top 13 destinations in the region also declined in value. North America’s decline, by 14 per cent to $525 million, was largely driven by the US, but also Canada to a lesser extent. Exports to Asia declined by 4 per cent to $637 million. There were mixed results across the Asian region, including a decline in exports to Singapore and an increase in exports to Hong Kong, two key trading hubs in the region, reflecting unpredictable market conditions at present. Key emerging markets such as Thailand, Philippines and Vietnam grew in value during the period.

Figure 5: Export value growth/decline by region

The top five markets by value were:

  • UK (down 14 per cent to $364 million – 20 per cent share of total export value)
  • US (down 18 per cent to $359 million –  19 per cent share of total export value)
  • Hong Kong (up 29 per cent to $220 million – 12 per cent share of total export value)
  • Canada (down 6 per cent to $163 million – 9 per cent share of total export value), and
  • Singapore (down 24 per cent to $128 million – 7 per cent share of total export value).

The top five markets by volume were:

  • UK (down 3 per cent to 220 million litres – 35 per cent share of total export volume)
  • US (down 3 per cent to 135 million litres – 22 per cent share of total export volume)
  • Canada (up 43 per cent to 77 million litres– 12 per cent share of total export volume)
  • New Zealand (down 3 per cent to 31 million litres – 5 per cent share of total export volume), and
  • Germany (down 12 per cent to 28 million litres –5 per cent share of total export volume).

For more detailed information, please read the full Export Report. You can also explore the data on the Export Dashboard.

[1]Unless otherwise stated all values are given in Australian dollars.

[2]All export wine values are the ‘Free on board' (FOB) 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.


This content is restricted to wine exporters and levy-payers. Some reports are available for purchase to non-levy payers/exporters.

Levy payers/exporters
Non-levy payers/exporters
Find out more

This content is restricted to wine exporters and levy-payers. Some reports are available for purchase to non-levy payers/exporters.