AUSTRALIA: Comment - Australian figures hide pressure on value
Analysis of Australia's latest wine export figures brings into question the bullish reports of the last week. Although sales to the US reached a record A$42.6m (US$21.9m) in October, contract winemaking and branding is reducing the value and cutting into prices paid.
The average price for Australian wine sold into the US in October was A$5.73 a litre compared with A$6.83 in October 2000 according to Sam Tolley, chief executive of the Australian Wine and Brandy Corporation.
Tolley said exports to the US continued to show strong growth in October despite the September terrorist attacks and he did not expect any significant fall.
But average prices were being affected by wine bottled in Australia for American labels.
"Some US-owned American labels are sourcing Australian wine and selling in the US. It's called Australian wine but made under contract for US producers and tends to have lower value."
Tolley cited Constellation Brands, the US major that recently formed a joint venture with BRL Hardy of Australia, as an example of the alternative to actual purchase of the physical assets of an Australian winery.
Another quirk thrown up by the official Australian wine export figures was a surge in sales to the most traditional market of all, France. October figures showed exports to France up 87% in volume and 127% in value.
"We are seeing some Australian wine in French supermarkets with some of the younger people trying it," Tolley said.
"But it is mostly bulk wine that is being bottled there and trans-shipped to the United Kingdom."
France is the 13th largest buyer of Australian wine with sales worth A$15m in the past year.
Companies: Constellation Brands
A consortium led by Constellation Brands has made a tentative approach for Allied Domecq....
The Board of Directors of Constellation Brands, Inc. has declared a quarterly dividend on the company's 5.75% Series A Mandatory Convertible Preferred Stock, payable on 1 June, to shareholders of reco...
Constellation is expected to launch a counter-bid for Allied Domecq by the end of this month, according to press reports....
The Hardy Wine Company has posted a record grape harvest....
Constellation Brands is to launch a new Australian wine brand onto the US market through its North Lake Wines. The wine will be called Kelly's Revenge....
A host of drinks companies spent the weekend mulling over whether to launch counter-bids for Allied Domecq, according to press reports over the last few days....
This weekend's press reports have thrown up two other interested parties in the potential Allied Domecq carve-up....
Constellation Brands is interested in some of Allied Domecq's spirits brands, according to reports today (15 April)....
- Carlsberg's Q4 & full-year results - Preview
- Pernod Ricard 's first-half results - Preview
- Key trends for beer in 2016 - Focus
- Six key trends for alcoholic drinks in 2016
- The global beer category - The facts
- Asahi Group lines up Grolsch, Meantime, Peroni buy
- Diageo completes wine category exit in US
- Beam Suntory targets Kenya with Edrington/FIX
- SABMiller's Europe chief to join Britvic board
- Asahi Group to buy Grolsch, Peroni from SABMiller
- Global travel retail insights - market forecasts, product innovation and consumer trends
- What Next for Beer and Brewers Following the MegaBrew Deal?
- Global Beer Trends 2015 : Global Beer Trends and Long-term Forecasts
- Global Whiskey Market 2016-2020
- Global sparkling wine insights - market forecasts, product innovation and consumer trends research