In a significant rebound, Australian wine exports saw a remarkable 34% increase in value, reaching USD 2.39 billion in the 12 months ending September 2024.
This surge represents the highest level of shipments in both volume and value since August 2021, marking a strong recovery for the industry. A key driver behind this growth was the re-entry into the Chinese market after tariffs on Australian bottled wine were removed in March 2024. This tariff removal reignited Australian wine exports to mainland China, resulting in an impressive value increase of USD 604 million, bringing the total value of shipments to USD 612 million. Additionally, the volume of exports to China surged by 58 million litres, totaling 59 million litres by the end of September 2024.
Global Trends and Challenges
While the Chinese market’s recovery was a boon for Australian wine, exports to other global destinations remained stable at USD 1.78 billion. However, the total export volume outside China declined by 3%, primarily driven by the U.S. market, where a significant drop in unpackaged wine shipments led to a 21-million-litre reduction in volume. This downturn aligns with broader global trends, as wine consumption continues to decline amid rising health consciousness and cost-of-living pressures, compounded by logistical challenges caused by regional conflicts.
A report from Trade Data Monitor highlights the difficult conditions faced by wine exporters worldwide. The top 10 wine-exporting nations, including Italy, Spain, France, and South Africa, recorded a 3% decline in volume for the year ending June 2024. Shipping costs and delays have further impacted international trade, contributing to the challenges faced by wine producers globally.
Wine Varieties and Market Performance
Still red wine was the standout performer for Australia, with export volumes increasing by 16% to 356 million litres and value climbing 52% to USD 1.74 billion. The resurgence in exports to China, particularly of Shiraz, drove this growth. Shiraz exports rose by 20% to 159 million litres, followed by increases in Cabernet Sauvignon and Merlot shipments, which grew by 11% and 5% respectively.
Conversely, still white wine exports experienced a 5% decline in volume, dropping to 259 million litres. Despite this, white wine export value increased slightly by 0.4%, reaching USD 549 million. The decline in white wine exports was most pronounced in the U.S., New Zealand, and Canada, though increased shipments to the UK and China helped to offset some losses. Chardonnay remained the dominant white variety, although its volume decreased by 3% to 143 million litres, with Pinot Gris/Grigio and Sauvignon Blanc also recording declines.
Australian sparkling wine exports performed better, with volumes increasing by 9% to 13 million litres and value rising 7% to USD 71 million. New Zealand led the demand for Australian sparkling wines, followed by growth in Sweden, the Netherlands, mainland China, and Canada.
Key Markets and Regional Insights
Northeast Asia emerged as the top export region for Australian wine in 2024, with a massive 200% increase in value to USD 985 million. This surge was driven by the renewed trade with mainland China and strong growth in Hong Kong. Europe followed as the second-largest region, buoyed by a rebound in exports to the UK and Belgium, which helped counter declines in other markets like Germany and Spain.
North American exports, however, declined by 5%, primarily due to the sharp drop in U.S. shipments. Exports to Canada remained stable, but the overall decrease in North American demand presents a challenge for Australian wine producers.
Top Five Markets by Value (Sept 2024):
- Mainland China: USD 612 million (up USD 604 million)
- United Kingdom: USD 362 million (up USD 9 million)
- United States: USD 341 million (down USD 25 million)
- Hong Kong: USD 270 million (up USD 65 million)
- Canada: USD 147 million (down USD 0.08 million)
Top Five Markets by Volume (Sept 2024):
- United Kingdom: 222 million litres (up 7 million litres)
- United States: 113 million litres (down 21 million litres)
- Canada: 68 million litres (down 6 million litres)
- Mainland China: 59 million litres (up 58 million litres)
- New Zealand: 26 million litres (down 5 million litres)
Market Outlook
Wine Australia's General Manager of Marketing, Paul Turale, noted that while the global wine market is facing considerable challenges, the reopening of the Chinese market presents a substantial opportunity for Australian wine producers. Turale expressed optimism that the surge in Chinese demand could not only restore supply chains but also create sustainable volumes of exports as renewed interest from both trade and consumers takes hold.
Looking ahead, the Australian wine industry remains cautiously optimistic about the future, especially with the potential for further recovery in China. However, the broader global market continues to face headwinds, with changing consumer habits, economic pressures, and geopolitical uncertainties creating an unpredictable environment for exporters.
In the coming months, maintaining a foothold in key markets such as the UK and the U.S. will be essential, as will navigating challenges posed by shipping delays and rising costs. If Australian wine producers can continue to build on the momentum gained in China, the outlook for 2025 could be one of sustained growth and expanded market opportunities.
Source: Wine Australia