China is closing in on the UK in the top three wine export markets for Australia

China is closing in on the UK in the top three wine export markets for Australia

Asia is emerging as an increasingly attractive and significant destination for Australia’s wine exports, which experienced their strongest period of growth since the peak of 2007 in the 12 months to the end of September.

In figures released by trade association Wine Australia late last week, the region, which includes the booming Chinese market, has become Australian wine’s number one region for exports by value, boosted by a series of free trade agreements and increasing disposable income. Exports in the year to September rose 31% to a new high of AUD644m (US$468.6m).

Asia was the headline act in a stand-out year for the sector, with value rising 8% to AUD1.96bn and volume up 5% to 734m litres.

According to Wine Australia's figures, increasing demand for premium wines in all regions, but especially Asia, drove average export prices up 3% to AUD2.67 per litre, while bottled wine export prices rose 4% to AUD5/litre.

Growth was strongest in the last quarter, with value up 15% in the three months to September, outstripping volume growth of 5%, Wine Australia added.

While all key price segments experienced growth, premium wines fared particularly well: wines above AUD10/litre posted export gains of 28% to AUD426m, a record, while wines priced AUD7.50-9.99 rose 7% to AUD138m.

“The promotion of Australia’s distinctive fine wine is a long-term strategic priority for Wine Australia, and it’s encouraging to see strong export figures in the premium end of the market,” Wine Australia said.

Exports at the luxury end were also up, with wines in the AUD20-50 segment rising 13% and wines above AUD50 surging by 54%.

The US remains Australia’s most lucrative wine export destination, but shipments fell 4% by value in the year to September to AUD427m, while exports to the UK, the number two market and the biggest by volume, slipped 2% to AUD370m.

China is now closing in on the UK in third place at AUD313m after a 47% surge, followed by Canada at AUD189m (up 4%) and Hong Kong in fifth at AUD118m, up 24%. The growth in Asia has had an effect on the export mix, with red wine exports rising 8% to 414m litres over the year, while white wine shipments declined by 2% to 293 litres.

Shiraz continues to be the most exported variety, with export value rising 8% on the year and volume up 9% – but Cabernet Sauvignon recorded impressive growth of 23% by value, and Shiraz/Cabernet blends saw average value increase by 41% to AUD16.87/litre, making them, in Wine Australia’s words, a “real shining light”.