Australia remains one of the powerhouses of the global wine industry. As the world’s fifth-largest wine producer by volume, the country is also a major exporter by value, with nearly 59% of its wine production destined for international markets.
However, much like Italy and France, Australia is now facing a clear slowdown in export performance, reflecting broader structural challenges affecting the global wine sector.
According to Wine Australia’s Export Report, Australian wine exports declined in 2025 both in value and volume. Total export value fell by 8% year-on-year to AUD 2.34 billion, while volumes decreased by 6% to 613 million liters. The average free-on-board export price also weakened, dropping by 3% to AUD 3.81 per liter. These figures confirm that the downturn is not merely volume-driven, but also reflects pressure on pricing and value realization across key markets.
Key Markets Weigh on Overall Performance
The decline in exports was largely driven by weaker performance in several of Australia’s most important destinations. Mainland China and the United States recorded significant drops in export value, while the United Kingdom saw a notable decline in volume. These three markets remain central to Australian wine exports, and their contraction has had a disproportionate impact on overall results.
In 2025, the top five export markets by value were mainland China, the United Kingdom, the United States, Canada, and Singapore. Mainland China remained Australia’s largest market by value at AUD 755 million, despite a sharp 17% decline. The United Kingdom followed with AUD 343 million (down 3%), while exports to the United States fell 12% to AUD 287 million. In contrast, Canada emerged as a standout performer, with export value rising 12% to AUD 175 million, and Singapore recorded an impressive 18% increase to AUD 118 million.
From a volume perspective, the United Kingdom continued to lead with 194 million liters exported, although this represented a 9% decline. The United States ranked second with 118 million liters, posting an 11% increase driven largely by bulk wine shipments. Mainland China followed with 69 million liters (down 18%), while Canada and New Zealand rounded out the top five.
Regional Declines and the Limits of China’s Reopening
All major export regions posted declines in value terms during 2025. Asia, Australia’s largest regional market, accounting for 53% of total export value, fell by 11% to AUD 1.2 billion. Europe and North America each declined by 5%, while exports to Oceania fell by 8%. Smaller markets experienced an even steeper contraction, with value down 22%.
Peter Bailey, Head of Market Insights at Wine Australia, explained that the weak export performance aligns with a long-term decline in wine consumption across major global markets. Consumers are increasingly moderating alcohol intake due to wellness trends, while rising living costs are limiting discretionary spending. At the same time, exporters face additional pressure from trade barriers, logistical challenges, and regional conflicts that increase costs and complexity.
The reopening of the Chinese market following the removal of tariffs in March 2024 provided only temporary relief. While shipments surged in the first three quarters after tariffs were lifted, underlying consumer demand remained weak. The Chinese wine market is now estimated to be just one-third the size it was five years ago, affecting both domestic producers and importers alike. Consumer confidence has recovered only marginally since reaching historic lows during the pandemic in 2022.
A key structural shift within China was the sharp decline in Australian red wine shipments in 2025. In contrast, white wine exports surged, with volumes up 77%, increasing white wine’s share of total exports to China to 15%, more than double the previous year. Chardonnay, Sauvignon Blanc, and Riesling were the main beneficiaries of this trend, highlighting changing consumer preferences even within a shrinking market.
Diversification Brings Pockets of Growth
Despite the overall downturn, there were encouraging signs of diversification beyond Australia’s traditional core markets. Canada delivered the strongest performance, driven in part by Canadian consumers seeking alternatives to American wines after US labels were removed from shelves in specialty liquor retailers. This shift created new opportunities for Australian producers, particularly in the premium and mid-range segments.
Elsewhere in Asia, excluding mainland China, export value increased by 1% to AUD 494 million. Singapore stood out as a regional hub, overtaking Hong Kong for the first time following an 18% increase in export value. Strong growth was also recorded in Thailand, Malaysia, Indonesia, and Taiwan, while Japan and South Korea posted more modest but still positive gains.
Meanwhile, the United Kingdom and the United States continue to account for more than half of Australia’s export volume. Both markets are grappling with changing consumption habits and cost-of-living pressures. While overall export value declined in both countries, there were positive signals at the premium end. In the UK, shipments priced above AUD 7.50 per liter increased by 15%, indicating continued demand for higher-quality Australian wines even as total consumption falls.
A Challenging Outlook for Exporters
Australia’s 2025 export performance underscores the structural challenges facing wine exporters globally. Slowing consumption, heightened price sensitivity, and shifting preferences are forcing producers to rethink market strategies, product mix, and pricing. While diversification into emerging Asian markets and strong performances in countries like Canada offer some optimism, the road ahead remains complex.
For Australian wine producers, long-term resilience is likely to depend on continued premiumization, greater market diversification, and alignment with evolving consumer tastes—particularly in whites and lighter styles—within an increasingly competitive global landscape.
Source: WineNews