Australia’s wine exports fell to their lowest annual volume in more than two decades in the 12 months to September 2026, as a steep decline in shipments to the United States outweighed gains in Southeast Asia, Canada and several other markets.
The latest figures highlight the challenges facing Australian wine producers as trade tensions, changing drinking habits and intensifying competition reshape international demand.
According to Wine Australia’s market bulletin, released on October 21, the country exported 590 million liters of wine during the period, a 5% decline compared with the previous 12 months. Export value fell even faster, dropping 7% to AUD 2.25 billion on a free-on-board basis.
The figures mark Australia’s lowest annual wine export volume since 2004 and point to a challenging environment for an industry that has traditionally relied on established markets such as the United States and the United Kingdom, alongside premium opportunities in mainland China.
U.S. Market Weakness Weighs on Overall Performance
The United States was the largest contributor to Australia’s export decline. Shipments to the American market fell by 27 million liters, or 22%, to 93 million liters. Export value dropped 28% to AUD 219 million.
Wine Australia attributed the downturn to several overlapping pressures, including tariffs on imported wine, a contracting domestic wine market, changing consumer behavior and strong competition from American producers operating in an oversupplied market.
The broader import figures underline the scale of the challenge. Citing Trade Data Monitor, Wine Australia reported that the value of U.S. wine imports from all countries fell 20% in the 12 months to August 2026, while import volume declined 13%.
Younger American consumers are also drinking less alcohol per occasion than previous generations, adding to the structural challenges facing wine producers. These trends suggest that Australia's difficulties in the U.S. cannot be attributed to trade barriers alone.
The sharp decline in American shipments was significant enough to offset volume growth in mainland China, Canada, New Zealand and Japan.
Southeast Asia Becomes an Increasingly Important Revenue Source
While Australia's traditional export markets struggled, Southeast Asia delivered a stronger performance. The region's import value for Australian wine increased 16% to AUD 291 million, overtaking the United States in export value.
The shift illustrates the growing importance of market diversification for Australian producers. However, Southeast Asia still accounts for just 4% of Australia's total export volume, meaning that its current growth has not yet translated into a substantial increase in overall shipments.
Thailand was the region's standout performer. Australian wine exports to the country rose 57% in value to a record AUD 73 million over the 12-month period.
Wine Australia attributed the increase to tax and policy changes, rising consumer interest in wine and Australia's established market position. Exports also increased to Malaysia, Indonesia, the Philippines and Vietnam, reinforcing Southeast Asia's potential as a source of future growth.
Although the region remains relatively small in volume terms, its expanding contribution to export revenue suggests that it could become increasingly important as Australian producers seek alternatives to weaker traditional destinations.
Canada Benefits From Changing Trade Dynamics
Canada emerged as Australia's strongest growth market in both value and volume. Exports increased 12% in value to AUD 185 million and 14% in volume to 70 million liters.
Wine Australia reported that Australian producers gained market share as American wines were removed from some Canadian retail shelves during the Canada-U.S. trade dispute.
Although growth moderated in the second half of the reporting period, shipments in the June and September quarters remained above the levels recorded a year earlier.
The gains extended across wine styles and price segments. Still red wines, particularly Cabernet Sauvignon, remained important drivers, while white and rosé wines also recorded increases.
Volume grew in wines priced below AUD 5 per liter as well as in those averaging AUD 5 per liter or more. This suggests that Australia's improved position in Canada was not confined to a single price category and that demand extended across both more affordable and higher-value offerings.
The Canadian experience also demonstrates how changes in trade policy can create opportunities for competing wine-exporting countries, although the durability of these gains will depend on future market conditions.
Mainland China Remains a Premium Market Despite Lower Export Value
Mainland China continued to be one of Australia's most important destinations for higher-value wine, even as its export performance weakened in value terms.
Australian wine export value to China fell 10% to AUD 759 million, while volume increased 8% to 79 million liters. The resulting average export value of AUD 9.57 per liter remained high compared with Australia's overall export profile.
The figures suggest that China continues to play a significant role in Australia's premium wine business, despite the decline in total revenue.
The market has experienced considerable volatility following the removal of Chinese tariffs on Australian bottled wine in March 2024. Wine Australia said shipment levels now appear to be stabilizing after two turbulent years, but cautioned that the outlook remains uncertain.
Economic headwinds and changing consumer behavior could continue to influence demand, making it difficult for exporters to predict how quickly the market will recover or whether previous revenue levels can be sustained.
China's mixed performance also illustrates why export volume alone does not provide a complete picture of market health: more wine can be shipped even as the total value of those shipments declines.
United Kingdom Faces Continued Pressure
Australia's second major traditional market, the United Kingdom, also recorded declines, although they were considerably smaller than those seen in the United States.
Export value fell 3% to AUD 327 million, while volume decreased 2% to 187 million liters. Wine Australia said the results broadly reflected weakening trends in Britain's off-premise wine retail market.
Still red wine accounted for much of the decline, but rosé provided a notable exception. Australian rosé exports to the UK increased 27% in volume during the reporting period as the category gained ground in the British market.
This contrast highlights the importance of adapting product portfolios to evolving consumer preferences. While overall market conditions remain challenging, individual wine styles can still find opportunities when they align with changing demand.
Export Value Falls Faster Than Volume
The difference between Australia's export volume and value performance offers another important insight. With volume down 5% and value down 7%, the average export value per liter declined by approximately 2.1%.
This calculation reflects the aggregate value of exported wine relative to the volume shipped. It should not be interpreted as a direct measure of price reductions, as the result can also be influenced by changes in product mix, destination markets and exchange rates.
Nevertheless, the figures indicate that Australia's export challenges extend beyond the number of liters sold. The country is also facing pressure on the revenue generated by those shipments.
For producers, the combination of declining volume and lower average export value can create additional pressure on profitability, particularly when production, packaging, logistics and market-development costs remain elevated.
Market Diversification Becomes Increasingly Important
Australia's latest export results reveal a wine industry navigating a more fragmented international marketplace. The United States remains a significant destination, but its steep decline has demonstrated the risks of relying heavily on a market facing economic, commercial and structural headwinds.
Meanwhile, Southeast Asia is generating stronger export revenue, Canada is delivering volume and value growth, and mainland China continues to offer premium-market opportunities despite ongoing uncertainty.
The United Kingdom's mixed performance further underlines the need to understand demand at the category level, with rosé outperforming the broader export trend even as still red wine faces pressure.
For Australian wine producers, the challenge will be to convert promising regional growth into sustained export performance while protecting value in established markets. Expanding distribution, adapting portfolios to local preferences and strengthening relationships with importers will be important elements of that strategy.
The latest figures do not necessarily signal a permanent decline in Australia's international wine trade. They do, however, demonstrate how quickly a downturn in a major destination can outweigh gains elsewhere—and why a more diversified approach to export markets is becoming increasingly important for the country's wine industry.
Source: Vinetur