By Nicki Bourlioufas
The value of Australian wine exports has hit its highest level since 2007, reaching $3 billion, despite unprecedented disruption in markets around the world caused by the COVID-19 pandemic, with exports to Europe jumping in value and overtaking North American exports.
For the 12 months ended September 2020, the value of Australian wine exports rose 4% to $2.998 billion while volumes fell 0.4% to 771 million litres (or 85.7 million cases), according to the latest Wine Australia Export Report. That is the highest level since exports hit the $3 billion mark in the second half of 2007. The average value of exports climbed 4% to $3.89 per litre.
The growth in value was predominantly driven by growth in exports to the UK and mainland China and was particularly strong in the last quarter of the 12-month period. From July 1 to September 30, 2020, the value of exports soared 23% compared to the same period in 2019. This comes after declines of 4% in the April to June quarter and 7% in the January to March quarter, when COVID-19 hit.
Change in value of exports by price segment in top four markets
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. Exports at $50 or more per litre increased by an average 34% in value to $438 million. The overall $10 or more segment increased by 4% $1.09 billion, as the table below shows.
Total exports by price segment ($ million FOB)
Much of the growth in premium wines came from exports to China. However, overall, the most significant growth in the value of exports was those heading to Europe, which jumped 16% to $678 million, over-taking North America in value for the first time since 2011. Most other major regions also recorded value growth.
The top five destinations by value all recorded growth. They were:
- Mainland China, up 4% to $1.2 billion
- USA, up 1% to $439 million
- UK, up 18% to $430 million
- Canada, up 4% to $196 million, and
- New Zealand, up 9% to $103 million.
The top five destinations by volume were:
- UK, up 10% to 256 million litres
- USA, down 4% to 141 million litres
- Mainland China, down 12% to 123 million litres
- Canada, down 7% to 56 million litres, and
- Germany, up 7% to 35 million litres.
Looking ahead, China’s anti-wine dumping inquiry could dent exports in 2021. The Chinese Ministry of Commerce (MOFCOM) in August initiated anti-dumping and investigations into Australian wine exports following a request by the China Alcoholic Drinks Association (CADA). The allegations have hit local wine exporters as political and trade tensions flare between the nations.