China's Austerity Crackdown Has Hammered Australian Wine Exports

Australian wine exports have had mixed results in 2013, but signs are good at the premium end.

Australian wine exports dropped by 6% over the last 12 months, while the drop in China is double that, at 12%, in the wake of crackdown on conspicuous consumption by Chinese authorities.

Wine Australia export approval report for March 2014 found that total exports fell 6% to 677 million litres, worth A$1.75 billion, while the China market sat at 37 million litres, valued at A$217 million.

The good news is that 2014 is looking brighter, with volumes increasing since the start of the year; and the average value of exports increased by 1% to A$2.59 per litre, due mainly to a 6% increase in the average value of bottled wine to A$4.68 per litre.

Overall, the market is patchy, with exports to the UK falling in line with a decline in overall consumption, although average value of bottled and bulk exports to the UK increased.

The US is a bright spot, perhaps aided by the fall in the Australian dollar, with the average value of Australian exports increasing by 15%.

While cheaper wines such as Yellowtail were seen as the golden goose, it seems Americans are returning to premium wines, with exports at above A$7.50lt segment rising by 6% to 4 million litres and the average value in that segment growing by 6% to a record A$13.32 per litre.

Wine Australia Chief Executive, Andreas Clark said that while volume was declining at the lower end, efforts to target higher end markets were working.

“While overall volumes declined, there were more exporters who recorded a volume increase (769) compared to those that recorded a decline (580),” he said.

“Bottled exports above A$5 per litre increased by 1% in volume to 66 million litres valued at A$644 million, with the average value of exports in this segment rising to a record A$9.57 per litre.”

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.