Australia

Australian wine seeing record growth in China and UK

By RJ Whitehead

- Last updated on GMT

After a period in the doldrums, Australian wine's fortunes are picking up
After a period in the doldrums, Australian wine's fortunes are picking up

Related tags: International trade

Australian wine exports to China are continuing to recover, and in some quarters are even experiencing record sales, according to industry figures released this week.

The Australian Grape and Wine Authority (AGWA), which examined the 12 months to end of March 2015, found that the market is up 20% to 44m litres with a value of A$242m (US$189m). 

Bulk exports increased 77% to 5m litres, while bottled exports saw record growth, up 15% to 39m litres.

Wine export approvals report

The lower and higher priced segments were the key drivers of this growth, with bottled exports below A$5 per litre up 25% to 24m litres, while bottled exports above A$7.50 per litre increased by 12% to 7m litres. 

This means China remains the number one destination for premium Australian wines.

Japan FTA making an impact

Exports to Japan also grew—by 20% to a record 11m litres in a strong indication that the Japan-Australia Economic Partnership Agreement (Jaepa), which was signed last July, is being embraced by exporters.

The Japanese tariff on bottled wine was cut this year from 15% to 11.3%, and will be eliminated entirely within seven years. The tariff on bulk wines was immediately reduced to zero.

This latter move was reflected in the growth of bulk wine exports in the first three months of 2015, up 414% compared to the same period in 2014.

Other Asian markets experiencing an upturn include Thailand, which saw growth 47% to a record 3.6m litres, valued at A$14m; Malaysia, with 10% to 3.2m litres; Taiwan, which was up 33% to 1.7m litres and the Philippines—up 22% to 1.2m litres, and growing in value by 19% to A$5.6m.

Overall, Australia has seen a rise of 3.6% to 711m litres, and total value increased by 3.9% to A$1.85bn. The average value of exports remained steady at A$2.60 per litre.

UK still seeing high volumes

AGWA’s chief executive, Andreas Clark, said anecdotal evidence of a renewed interest in Australian wines globally was now being reflected in export figures.

Some of the strongest growth is seen in the premium price segments and we’ll be continuing to champion Australia’s finest wines in our global marketing activities. While the above A$7.50 price segment accounts for just 5% of total export volume, the value share is considerably higher at 27%​,” said Clark.

He singled out the depreciating dollar, the Japanese free trade agreement and a rebound in the Chinese market from austerity measures. Elsewhere, improved economic conditions in Australia’s biggest export markets, the US and the UK, have prompted growth in these markets.

The UK, Australian wine’s biggest market by volume, saw the average value of bottled exports increase by 5% to A$4.13 per litre, the highest since 2008

“Asia continues to be a key driver of growth with more than half of exports in the above A$7.50 per litre segment shipped to Asian markets, with the average value of exports to Asia A$18.77 per litre,” said Clark.

Related topics: Markets, Oceania, Supply chain, Beverages

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