Australia’s wine sector recorded a production increase during the 2024–25 season, according to the latest report from Wine Australia.
While this marks the second consecutive year of growth, the rise comes at a challenging time: sales remain stagnant, domestic demand is subdued, and international markets offer only partial relief. As a result, national stock levels increased by 5%, intensifying long-term concerns for growers and producers.
Production Outpaces Sales
Wine Australia’s survey of major wineries shows that the 2025 harvest reached 1.13 billion liters, equal to 126 million nine-liter cases—a 9% increase compared to the previous year. Despite this improvement, production still sits 7% below the 10-year average of 1.22 billion liters.
Red Wine Reclaims Dominance
- Red wine production: +15%
- White wine production: +2%
- Share of total: Red returns to 52%, overtaking white after losing ground the previous season.
This shift signals both improved yields for red varieties and the industry’s ongoing challenge of aligning production with market realities—especially when global demand for big, full-bodied reds remains uneven.
Expert Perspective: A Rebound with Caveats
Peter Bailey, Head of Market Analysis at Wine Australia, noted that although production remains below the long-term average, the second consecutive year of growth represents a recovery from the low point recorded two years ago. He also highlighted that the rebound occurred despite entering the 2025 harvest with already elevated stock levels.
Sales data reflects the broader tension:
- Total sales: 1.08 billion liters (120 million cases)
- Change from previous year: virtually unchanged
- Exports: 59% of total sales (+1 percentage point)
Exports: Growth Driven by Mainland China
Exports increased 3%, reaching 638 million liters, with China driving much of the gain. Shipments to mainland China surged by 53 million liters to 85 million liters, marking the first full year without tariffs.
However, despite this improvement, export volumes to China remain less than half of the peak levels seen in 2017–2018. The current gap—equivalent to around 130,000 tons of grapes, mostly red varieties—highlights how dramatically the landscape has shifted.
Bailey cautioned that producers should not expect a return to former volumes, noting structural changes in both China’s market and global trade conditions.
Growing Stockpiles Signal Pressure Ahead
While rising production may suggest positive momentum, Wine Australia warns of serious implications:
If stock levels continue to increase without corresponding sales growth, demand for grapes could decline further.
This would mean:
- Sustained pressure on grape prices
- Reduced profitability for growers
- Prolonged imbalance between production and market needs
In short, the sector’s recovery remains fragile. Without stronger demand—either domestically or internationally—higher production risks amplifying the very challenges the industry is attempting to overcome.
Source: Vinetur