by Meininger’s Wine Business International
In 2007, export value outstripped volume growth for Australian wines, according to data released by the Australian Wine & Brandy Corporation. While value rose 6% to reach the milestone of A$3 billion (€1.8bn) in
July, and continues to grow, volume grew by only 3% to reach 785 million litres, with value per litre up 3% to A$3.83 (€2.30). The only caveat? Domestic wine sales fell by 8.7%.
Contributing to the increase in average price was a rise in the share of bottled wine in the export mix (up 4%) and a decrease in lower priced bulk shipments. The average price of all bulk wine increased 4% to A$1.09 per litre.
The United Kingdom remained the number one export market in volume and value, volume growing 9% to 290m litres and value growing 6%, but the average price per litre down almost 3% to A$3.39.
The appreciation of the Australian dollar contributed to a decline in shipments to the United States to 204m litres, but an increase in higher priced bottled wine shipments drove the average price up 7% to reach $4.49 per litre.
For many of the same reasons, shipments to Canada, Australia’s third largest market, were also down 5% to just under 49m litres, but the average price soared to A$5.79, making it the most lucrative market for Australian producers.
In Germany, on the other hand, the fourth largest market, volumes grew by 6% to 37m litres, but at an average price of only A$1.65 per litre, make Germany the least attractive export destination. Shipments to the neighbouring Netherlands almost doubled, with bottled wine exports reaching 25m litres at the healthier average price of A$2.88 per litre.
Over the same period, the volumes of foreign wine imported into Australia doubled from 3 to 6m litres, according to the Australian Bureau of Statistics. While New Zealand continues to account for half of this volume, countries like Chile have made remarkable advances.
Government statistics show that wine production in the year 2007 fell by almost one third from the previous year to 978 million litres. This drop in production, due mainly to drought, coupled with rising exports have drained Australia's glut by 15 percent to 1.8 billion litres last year from 2.1 billion litres the year before. Given the short 2008 harvest, the lake of excess wine could dry up this year, putting further upward pressure on already rising prices.
