Australian wine exports jump for first time since 2007

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Australian wine exports jump for first time since 2007

The value of wine exports has risen for the first time since 2007, driven by rising sales of premium wines.
Figures from Wine Australia show sales of ultra premium wines, or wines priced above $50 per bottle, hit a record during 2014 helping boost the average value of Australian bottled wine exports by 7 per cent to $4.85 per litre, its highest level in a decade.
Australian Grape and Wine Autority’s acting chief executive Andreas Clark said there was an increase in wine exports across all premium price segments last year, which are priced from $7.50 per bottle and over.
“It’s encouraging to see the value of Australian wine exports in positive growth for the first time since 2007 and increasing demand for our premium wines was a major contributing factor to that growth,” Mr Clark said.
Wines selling for more than $50 per litre only account for a tiny proportion of exports. But increasing sales is a positive sign for the industry because the while accounting for just 0.5 per cent of export volumes the segment accounted for 8 per cent of the value of Australian bottled wine exports.
Overall, Australian wine exports grew 1.9 per cent to 700 million litres. The average selling price, which includes bulk and bottled wine, remained steady at $2.60 per litre, valuing exports at $1.82 billion, the highest since 2007.
The average value of Australian bottled wine exports rose to is the highest in a decade, lifting 7 per cent to $4.85 per litre.
But the wine industry has been warned: the good times will not be enjoyed to all of the nation’s 2,573 producers.
Rabobank senior analyst Marc Soccio said retail consolidation was making it tougher for smaller producers, even if they were making premium wines.
“The high volume off-premise channel, particularly the major grocery retail chains, is growing more and more influential in determining which products find their way to consumers,” Mr Soccio said.
“That has been limiting space for smaller producers. That’s why we are seeing bigger more commercial players like Casella and Accolade making investments at the premium end. They are the ones that can unlock the value in those companies and brands whereas on their own they have been struggling to do so.”
Last month Casella Wines bought Barossa Valley producer Peter Lehman while Accolade, the nation’s biggest producer by volume, agreed to buy Grant Burge Wines.
West Australian winemaker Larry Cherubino, who makes wines under his eponymous label as well as for Robert Oatley, said Australian winemakers need to work hard to repair exports markets including the US, where many producers fled in the face of a higher dollar.
“A lot of people got out when it was difficult and there was no margin to be had,” Mr Cherubino said. “Those that stuck with it are now making inroads.”
Mr Cherubino, who exports about 20 per cent of his wines, said the lower Australian dollar was improving conditions for winemakers.
But he said the industry had to work harder at home and abroad to improve the image of Australian wine.
Mr Soccio said the lower dollar would help producers but Australian winemakers needed to also improve their reputation in the US, where large retailers were also becoming more influential.
“It’s [lower dollar] not necessarily a panacea and not going to solve their problems overnight,” Mr Soccio said.
“You look at where we are seeing these trends where they are most distinctive like the US and Canada and Australian wine is really still on the nose.”
Wine Australia has blamed consecutive record US grape harvests for cutting demand for imported wine, which fell 5 per cent to 1.1 billion litres in the year to November.
However, Australian imports fell faster, dropping 9 per cent to 164 million litres in the year to 164 million litres. But sales of wine above $10 per litre increased 3 per cent to 1.6 million litres.
Wine sales to Australia’s biggest market, the UK, rose 4.5 per cent to 249 litres.
Wine sales to China rose 8 per cent to 40 million litres valued at $224 million.
More than 90 per cent of Australia’s ultra premium wines, or wines priced above $50 per bottle, were exported to Asia.