ExportsNews

Australian Wine Exports Drop $210 Million In Two Months

By Wednesday 3 February 2021No Comments

Australian wine exports reached a record $3.1 billion in the 12 months to the end of October 2020 before crashing to $2.89 billion by the end of December – a loss of $210 million in two months.

The previous year-on-year high point had been $3 billion reached in 2007.

It’s not all doom and gloom – exports to the United Kingdom increased by 29 percent in value to $456 million.

Exports to Europe were up 22 percent to $704 million – the highest value in a decade. There was also growth in North America, up four percent to $628 million, and Oceania, up 11 percent to $115 million.

There was a 0.5 percent increase in volume to 747 million litres (83 million 9-litre case equivalents) and a one percent decline in average price to $3.87 per litre free on board (FOB) in the 12 months to December 2020, according to Wine Australia’s latest Export Report released today.

Exports increased sharply from August to October, primarily to mainland China and the United Kingdom (UK), while the decline in November and December was predominantly in exports to China.

Wine Australia CEO Andreas Clark said that exports to mainland China were immediately down following the imposition of the temporary tariffs in November.

The sharp decline in export volumes and value in the final two months of the year saw the overall value for 2020 decline by 14 percent to $1.01 billion and volume drop by 29 percent to 96 million litres (10.7 million 9-litre case equivalents).

“It is expected that exports to China will remain low in coming months affecting total export numbers during 2021,” Mr Clark said.

“Wine businesses are resilient and are already adapting to these changed market conditions, increasing their engagement in markets other than China, particularly the UK, USA, Canada and the domestic market,” Mr Clark said.

Mr Clark said that there was a decline in value across most price points with the notable exception of exports under $2.50 per litre FOB, which grew by 17 percent, driven by increased shipments to the UK, New Zealand, Scandinavia, Germany and Canada.

In the year to December 2020, the value of wine exported in glass bottles (the subject of temporary tariffs imposed by China in November 2020) decreased by five percent to $2.3 billion while volume decreased by nine percent to 311 million litres (35 million 9-litre case equivalents).

Unpackaged wine exports increased by 20 percent in value to $585 million and increased nine percent in volume to 428 million litres (48 million 9-litre case equivalents). The average price of unpackaged wine increased by 10 percent to $1.37 per litre FOB.

The top five markets by value were:

  • Mainland China, down 14 percent to $1.01 billion.
  • United Kingdom (UK), up 29 percent to $456 million.
  • United States of America (USA), up four percent to $434 million.
  • Canada, up five percent to $192 million, and
  • Hong Kong, up 27 percent to $132 million.

The top five destinations by volume were:

  • UK, up 19 percent to 266 million litres.
  • USA, down one percent to 136 million litres.
  • Mainland China, down 29 percent to 96 million litres.
  • Canada, up 0.3 percent to 56 million litres, and
  • Germany, up 10 percent to 35 million litres.

The UK continued the strong growth that commenced at the advent of the pandemic due to increased demand, which was then boosted in the months leading up to Brexit. Exports in the 12 months ended December 2020 to the UK increased by 29 percent in value to $456 million and 19 percent in volume to 266 million litres (29.6 million cases), extending the UK’s lead as the biggest destination for Australian wine exports by volume. The average price received for Australian wine increased by nine percent to $1.71 per litre FOB, the highest level since September 2011.

After declining for the three previous calendar years, the value of exports to the USA increased, despite the widespread effects of the pandemic and the political turmoil that engulfed the country during the year.

The value of exports increased by four percent to $434 million, despite volume falling by one percent to 136 million litres (15.1 million cases). The average value increased by five percent to $3.21 per litre FOB, the highest level since 2009.

Photo by Aron Yigin on Unsplash

Leave a Reply