01-05-2025
Australian wine exports drop to 20-year low excluding sales to China
Australian winemakers are deeply concerned about recent data indicating the nation is exporting some of its lowest wine volumes in more than two decades.
Excluding China, the amount of Australian wine exported to the rest of the world declined in the past 12 months, as cheaper, bulk wine falls out of favour and health-conscious consumers drink less.
While China took $1.03 billion worth of Australia's premium wine last year, Wine Australia's latest report shows the lucrative market has cooled from its peak.
It has prompted Australian winemakers to again call for support to find new markets, or transition out of the industry.
The Chinese market for Australian wine producers has reduced by more than two-thirds since 2018.
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Supplied Kingston Wine Estates
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Wine Australia marketing insights manager Peter Bailey said the industry faced tough times, and it could get worse.
"What it shows is the global wine market is facing considerable headwinds, which are impacting on the results outside of China, and they're unlikely to be resolved in the near term," he said.
"
We're seeing a long-term trend of consumers drinking less alcohol due to health and wellbeing concerns, and more recently it's been around cost-of-living pressures, and these could get worse in certain markets given the economic and political turmoil taking place globally.
"
Premium wine drives growth
Australia's overall wine exports increased 41 per cent in value last year to reach $2.64 billion, while overall volume increased by just six per cent.
The increase in value was attributed mainly to premium wine heading to China after the removal of hefty tariffs last year.
But the volume of wine exported to China was well below its pre-tariff peak, while exports to the rest of the world dropped by nine per cent.
Almost 60 per cent of the wine produced in Australia is exported.
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ABC Riverland: Will Hunter
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Mr Bailey said China remained keen on Australia's premium wine but was not the solution to the industry's wider crisis.
"The lower volume and higher value demonstrate that China is very much a premium market for Australian wine and will therefore not solve any oversupply issues," he said.
Call for government support
Kingston Estate Wines, in South Australia's Riverland, is one of Australia's leading bulk wine exporters.
Managing director Bill Moularadellis said the entire industry was adapting to a very different Chinese market since tariffs.
"We're all competing in a much smaller market, and there's been significant price deflation," he said.
Mr Moularadellis said some premium brands had been able to grow sales in China, but it was important to look at the full picture.
"It will be a mistake to allow the Chinese export sales growth to hide and mask the contraction in world consumption and exports into our established markets,"
he said.
Kingston Estate Wines exports about 90 per cent of its total production.
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Supplied: Kingston Estate Wines
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Mr Moularadellis said the "seismic shift" in global drinking habits required new markets and products to revive the industry.
"There has been a focus on premiumisation, and with that, there's been an abandonment of new product development that's targeted at new wine consumers," he said.
"We must concentrate our efforts and resources on entry level products that recruit new consumers that ultimately become the premium wine consumers of tomorrow."
Mr Moularadellis said the industry was "unfairly disadvantaged" through China's tariffs and needed government assistance through an expanded export market development grant scheme.
Some silver linings
Matt McCulloch, managing director at Langmeil Winery in the Barossa, welcomed the news that China had imported more than $1 billion worth of Australian wine last year.
Photo shows
A hand reaches for a glass of wine. A Harry Potter book is on the coffee table
Australian wine exports have been hit by a global trend in people drinking less alcohol and cutting costs, but hope remains for the re-opening of a major market.
"It's good to see the recovery in pretty challenging times that we've had since COVID, and then tariffs, then geopolitical tensions, cost-of-living pressures, overall … getting back up towards about 90 per cent of where we were before the events of 2020 onward took place," Mr McCulloch said.
"
However, that's the headline numbers. Within that, there's a lot of pain in the industry out there still at the moment.
"
Mr McCulloch said if consumption and production were falling for the Australian industry as a whole, but there was still an excess in the global wine sector, "then we've got to have a look at what we'll be doing in the future".
"Which is focusing on being a better but not bigger industry, making fewer and finer wines," he said.
"But that's going to be a relatively painful transition for some, more than others."
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