US wine exports, 95% from California, surged to US$794m in winery revenues in 2004, a 28% jump over the previous year, according to preliminary figures released by the US Department of Commerce. Exports exceeded the previous year by US$173m - by far the largest yearly increase ever. By volume, exports increased 29% to 119m gallons (450m litres.)

"More than 60% of California wine exports are to the EU, despite the fact that our vintners face significant trade barriers, including high tariffs and a heavily subsidised EU wine industry," said Wine Institute president and CEO Robert P. Koch. "We are hopeful that the ongoing bilateral wine trade negotiations with the EU and the next round of World Trade Organisation negotiations will lower these barriers."

"The weaker dollar has allowed California wineries to better compete at key price points in the world export market," says Wine Institute international director Joseph A. Rollo. "The wineries are now reaping the benefits of their hard work and marketing efforts of the last few years and establishing brands in major markets."

The top market for California wine is the UK, which experienced a 41% increase in revenues to US$299.1m and a volume jump of 20% to 38m gallons. The other leading markets are: Canada, US$123.8m; Netherlands, US$85.6m; Japan, US$82.1m; Germany, US$26.8m; Mexico, US$14.5m; Switzerland, US$14m; Denmark, US$14m; Ireland, US$13.9m; Belgium/Luxembourg, US$13.4m.

"California wine had another fantastic year in the UK, with growth far beyond any of our competitors," said John McLaren, Wine Institute UK director. "Nearly one in every seven bottles of wine consumed in the UK now comes from the Golden State."

Wine Institute's European director Paul Molleman reported that exports to the European continent (excluding the UK) reached a record 10.6m cases in 2004. "We have improved our position not only in more established markets such as Germany and Switzerland, but also in developing wine markets. Our business in Russia, for instance, almost doubled in 2004 to reach 100,000 cases."

In Japan, which had a 35% increase in US wine exports, deregulation of liquor retailing licenses in September 2003 was followed by many supermarket stores starting to sell wines in 2004 for the first time, according to Wine Institute Japan director Ken-ichi Hori. "California wine is particularly strong in the popular priced segment, replacing domestic brands made from imported concentrates and bulk wine," he said

Wine Institute's Canada director Rick Slomka said: "Despite fierce competition from other wine-producing regions, California wines are regaining market share in the Canadian market as a result of more favourable exchange rates and exciting new product introductions. One of the most promising segments continues to be the on-premise business where California wine is a popular accompaniment to the overall dining experience for Canadian consumers."

Packaged California table wine brands account for most of the sales, which, along with other US table wine exports, total US$592m, up 19%. Bulk wine sales grew 87% to US$81m, as California wineries realised cost savings by exporting their finished bulk wine and bottling it abroad. US champagne/sparkling wines are US$13m; dessert wine, US$43m; and fermented beverages and other, US$64m.