Australian wine exports experienced a remarkable turnaround in 2024, driven by the reopening of the Chinese market.
According to Wine Australia’s Export Report, the total export value surged by 34% to USD 2.55 billion, while volume grew by 7% to 649 million litres. This recovery follows years of turbulence due to tariffs and shifting global consumption patterns.
China’s Influence: A Game Changer for Australian Wine
The key catalyst behind the value increase was the removal of tariffs on Australian bottled wine in March 2024, reigniting demand from mainland China. Over the subsequent nine months, 83 million litres worth USD 902 million were exported to the country, making China once again Australia’s top export market.
- The average value of exports to China reached USD 10.79 per litre, a premium price point reflecting the market’s preference for high-quality bottled wines.
- This trend also lifted the average value of total packaged wine exports to USD 9.35 per litre, a record high.
- Red wine dominated exports to China, accounting for 93% of total shipments, reinforcing the strength of varieties like Shiraz, Cabernet Sauvignon, and Merlot.
Despite this initial rebound, Chinese wine consumption remains lower than pre-tariff levels, and experts caution that long-term export volumes to the market are still uncertain.
A Decline in Global Markets Amid Industry Challenges
While China’s rebound has been a bright spot, exports to the rest of the world declined by 13% in value (USD 1.64 billion) and 7% in volume (565 million litres) in 2024. Several factors contributed to this downturn:
- North America: Exports to the US fell 5% to USD 325 million, largely due to declining demand for bulk wine. However, Canada showed some resilience, offsetting part of the loss.
- Europe: Exports fell 4% to USD 521 million, with drops in key markets such as the UK, Germany, Denmark, and the Netherlands. However, Sweden, Belgium, Finland, Ireland, and Poland saw growth.
- Hong Kong: Shipments plummeted USD 125 million as demand rebalanced following speculative exports in late 2023, ahead of China’s tariff removal.
- Asia (excluding China): Exports to most Asian markets fell, although the five-year growth trend remains positive at 4% annually.
Shifts in Wine Preferences and Market Dynamics
With China’s demand for premium red wines, Australia’s overall export composition has changed:
- Red and rosé wines’ share rose from 54% to 60% of total exports.
- White wines declined from 46% to 40%, as key export destinations for Australian whites saw weaker demand.
- Shiraz, Cabernet Sauvignon, and Merlot all increased in volume, whereas Chardonnay, Pinot Gris/Grigio, and Sauvignon Blanc saw declines.
Looking Ahead: Market Diversification is Key
While the short-term boost from China’s tariff removal is significant, industry experts, including Wine Australia’s Peter Bailey, emphasize the need for continued market diversification.
- The global wine industry faces headwinds from health-conscious consumption trends, economic pressures, and oversupply.
- Price sensitivity remains a challenge, particularly among Boomers, who expect lower prices while production costs remain high.
- Innovation and premiumisation will play an increasingly important role in sustaining growth outside China.
Conclusion
Australia’s wine industry is experiencing a pivotal shift in 2024. The reopening of the Chinese market has delivered a significant export value boost, but structural challenges in global wine consumption persist. As competition intensifies and economic pressures mount, Australian winemakers must balance short-term gains with long-term strategies to diversify their global reach.
Source: Wine Australia