South Australian wine exports begin to bounce back
The state’s wine exports have increased by 37 per cent following the lifting of crippling China tariffs, according to new data from Wine Australia.
The total value of South Australia’s wine exports reached $1.1 billion in the 12 months ending in June, a 37.2 per cent increase year-on-year.
Nationally, Australia’s wine exports increased in value by 17 per cent to $2.2 billion, with South Australian exports making up 12.8 per cent of the total volume of Australia’s exports.
A 6980 per cent increase in the value of exports to mainland China saw it become South Australia’s top wine export destination in the 12 months ending in June.
This equated to a $341.4 million increase, making it a $346.4 million market compared to the previous period’s $4.9 million.
Australian wine exports to Northeast Asia more than doubled in value year-on-year, reaching $780 million.
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The increase comes after China dropped its punitive tariffs on Australian wine exports earlier this year. Chinese exports from South Australia were valued at $946.5 million in October 2020, before the tariffs were introduced.
Graph: Wine Australia
“The surge in exports to mainland China towards the end of the financial year saw volume rise from 1 million litres to 33 million litres and value grow by $392 million to $400 million compared to last financial year,” said Wine Australia manager for market insights Peter Bailey.
“While the figures are very positive, they represent the re-stocking of Australian wine in the pipeline of a major market after a long absence and do not necessarily equate to retail sales.
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“It will take some time before there is a clearer picture of how Chinese consumers are responding to the increased availability of Australian wine in-market.”
The value of Australian exports excluding to China declined by 4 per cent to $1.8 billion, with the volume decreasing by 5 per cent to 587 million litres. This represents the lowest volume exported to the rest of the world excluding China in a financial year since 2003 – 2004.
“Global trading conditions remain very challenging with wine consumption continuing to fall in many markets around the world due to moderation trends and cost of living pressures,” Bailey said.
“Consumption of both domestic and imported wines in mainland China is less than a third of what it was six years ago and thus it is very unlikely that Australian wine exports will return to those previous peaks in the short to medium term.”
South Australian wine exports over time. Graph: Wine Australia
“There are also enduring problems in shipping, with a shortage of ships globally and freight and charter rates on the rise,” Bailey said.
While China topped the list in terms of value of exports, the United Kingdom was the top destination by volume, with 217 million litres of exports, followed by the United States, Canada, and then China, which had 33 million litres of exports.
“The volume of exports at 33 million litres is relatively small, equating to less than five per cent of Australia’s winegrape harvest in 2024 and so is unlikely to make a significant impact on the current oversupply of red winegrapes,” Bailey said.
South Australia’s red wine glut has seen a drastic oversupply of fruit, with Riverland Wine telling InDaily growers are seeing a loss of between $3000 and $5000 a hectare.
The most popular wine styles exported from South Australia were still reds, making up $934.6 million of the $1 billion market.
Cabernet sauvignon made up $283.6 million of export value, followed by shiraz with $266.9 million, and cabernet blend at $171.5 million.
