Corker future for wine exports

Australian wine export figures have a very healthy glow thanks largely to demand from China, according to a recent Federal Government report.

The latest figures from Wine Australia reveal the value of Australian wine exports grew by an impressive 15 per cent to $2.56 billion in 2016-17. Volume also increased by eight per cent to 811 million litres during the same period.

CCI will provide more information about Free Trade Agreements and how to take advantage of the country’s $90 billion trade balance at the inaugural CCI International Engagement and Growth Conference on May 29.

Wine Australia’s figures also show that the value growth in WA was eight per cent and volume growth one per cent. This increase was largely driven by Margaret River, which saw 14 per cent value growth, 10 per cent volume growth and an increase of 4 per cent average value per litre.

The growth in value and average value per litre is good news for WA producers, indicating further green shoots in the export market, profitability and price stability.

The report found WA’s top markets by both volume and value, in order, are China, United Kingdom, United States, Singapore and Hong Kong.

China is especially proving to be a fruitful export market. Red wine sales drove a 30 per cent volume increase, a 38 per cent value increase and a six per cent average value-per-litre increase.

Whites also increased by volume (27 per cent) and value (11 per cent), however saw a drop of 12 per cent in average value per litre.

Margaret River’s Watershed Wines Founder and Managing Director Geoff Barrett says the report reflects his own experience that there is a growing interest in Margaret River wines from China.

“We continue to see a growth in the number of Chinese importers sending our wines to China,” he says. “We’re also seeing a change in the value of the product. While the majority of the interest is still at the lowest price end for Margaret River, we’re now seeing demand for top-end wines increasing.

“We’ve just processed a container shipment for wines that are solely at the top end of our price range – and that’s new. In the past, the dominance of the exports has been at the lower and middle end with the odd order of some cases at the top end.”

Barrett predicts there will also be a surge of popularity in white wine in China soon in much the same way it occurred in Australia, which historically only drank red wine.

“We recently did a shipment container which was 100 per cent white wine,” he says.

Watershed was one of the first WA Margaret River exporters to China and now, Barrett says, without the Chinese market the whole Australian wine production sector would fall to ruins.

“We started in the Chinese market in 2004 when no one even considered China as a market for wine,” he says.

“I recall going to a major wine show in Shanghai and there were two Australian wine exporters there – and we were one of them.

“If you held one of those wine shows in Shanghai today, you would find almost every winery in Australia would want to be there.

“I think everyone knows the Australian domestic wine market is totally screwed and there’s no future in the Australian marketplace for the vast majority of wine producers.

“China is really the growth market. The powers-to-be in China expect there to be 35 million new wine consumers over the next five years.

“Compare that to Australia, where there are about five to six million. You’re talking about the Australian market times six or seven in just pure growth – and that’s ignoring the ones that are already consuming.”

 

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