Exports of Australian wine fell in both volume and value for the year up to July, the country's national wine body has said.

Shrinking markets in the UK and US led exports to drop in the 12-month period by 13% in volume to 703m litres, while value sales slumped 12% to A$2.6bn (US$2.31bn), the Australian Wine and Brandy Corporation (AWBC) said today (11 August).

A record-breaking drought has curtailed Australian grape harvests in the last couple of years. That, alongside growing competition from emerging wine countries such as Chile, a resurgent France and a strong Australian dollar, have brought new challenges for Australia in the UK and US, still its biggest export markets.

Poor wine sales forced the Foster's group to slash its full-year earnings forecast by 10% in June this year.

AWBC said: "Bulk wine was the main contributor to the overall volume decline but the decline in bulk shipments is stabilising on a month-by-month basis. The decline in bottled wine shipments continued."

Problems in the UK and US were partially offset by strong value growth in exports to China, Hong Kong and Singapore, where exports increased by A$10m, A$6m and A$4m respectively.

In the UK, Australia's official wine strategy has shifted this year to emphasise quality over quantity. The average price of Australian wine exports has risen 1% to A$3.77 per litre in the last year.