Positive trends emerge in Australian wine’s production, sales and inventory report

The Australian wine sector increased its production, sales and inventory last financial year, according to the Australian wine: Production, sales and inventory 2015–16 report released by Wine Australia.

The report, based on survey responses from the wine sector, shows a positive long-term trend for Australia’s wine production, sales and inventory, with continuing sales growth expected especially in export markets.

Wine Australia Manager, Market Insights Peter Bailey said the report is further evidence of the increased demand for all Australian wine.

‘The Australian wine sector saw growth in its production last year, which follows the 2016 vintage crush increase,’ he said.

‘Sales figures were very positive. In the domestic market, sales of Australian wine increased by a solid 6.9 per cent in value. This growth came from consumers trading up in terms of the prices paid for wine, as well as growth in cellar door sales, particularly for small winemakers.

‘The report also shows that the value and volume of exports increased. The growth in average value reflects the increasing demand for premium Australian wines.’

Production

Australia’s wine production grew by 10 per cent to 1.31 billion litres in 2016 – the highest since 2006. This was the result of higher than average yields combined with above-average juice extraction rates.

Red wine production increased by 13 per cent to 684 million litres, while production of white wine increased by 6.7 per cent to 627 million litres.

Sales

An additional 15 million litres of Australian wine was sold in 2015–16, compared with the year before, with an additional value of $408 million.

In a domestic market that has been largely static since 2006–07, sales of Australian wine increased by 6.9 per cent to just under $3 billion while the volume increased by 2.5 per cent to 468 million litres.

The value of Australian wine exports grew by 11 per cent to $2.1 billion, while volume increased by 0.5 per cent to 728 million litres in the 12 months to the end of June 2016.

Sales growth reflected production growth in being weighted towards red wines, which performed better in both domestic and export markets. Red varieties grew in volume by 4.5 per cent domestically and 4.4 per cent in exports, while white wine varieties grew in volume by 0.6 per cent in the domestic market and declined by 4.1 per cent in exports.

Although exports of white wine decreased in 2016, they were the third highest since 2005–06 and 12 million litres above the 10-year average. Red wines accounted for 39 per cent of domestic sales and 58 per cent of exports in 2015–16.

Inventory

As a result of the large crush, inventory increased by 7 per cent to 1.76 billion litres in 2015–16, with a greater increase in white wines.

The stock of red wine increased by 6 per cent to 1.07 billion litres, while for white wines, stocks increased by 9 per cent to 689 million litres, the highest since 2005–06.

Inventory-to-sales ratios at the end of 2015–16 were above long-term averages for red and white wine, but inventory levels were well below 2005–06 levels of nearly 2 billion litres.

Click here to view the Australian wine: Production, sales and inventory 2015–16 report.