Wine exports rise for first time in almost a decade but small producers not reaping the benefits

Wine exports rise for first time in almost a decade but small producers not reaping the benefits

 

Growing wine exports to China are a driving force behind new data that suggests the value of Australian wine exports has grown by 5% to $1.89 billion in the past 12 months.

According to the Wine Export Approval Report June 2015 released yesterday by Wine Australia, it is the first time the value of wine exports has increased since 2006–07.

In a statement, Wine Australia’s chief executive Andreas Clark said growth in value is being driven by the strength of Australian exports in the Asian market.

“‘The value of wine exports to Northeast Asia was up 29% and Southeast Asia was up 18%,” Clark said.

“We ship more than half of our exports above $A7.50/litre to Asia and the average value of those exports is $A18.49/litre compared to $A12.29/litre in Europe and $A11.54/litre in North America.”

 “This is the third consecutive financial year we’ve seen value growth in the above $7.50/litre price point, now worth $529 million.

“It accounts for 28% of total value share but only 5% of volume.”

Clark says the figures reflect the ongoing opportunities for Australian wine in the premium price points.

“Our two strategic priorities are increasing the demand and price paid for Australian wine, and increasing our competitiveness,” he said.

“We’ll be expanding our program of activities in the critical US market including the introduction of a formal Market Entry Program and we’ll continue to develop the export markets in Europe, China and Asia Pacific through activities that focus on Australia’s finest wines.”

However, central Victorian winemaker Wes Vine, of Mandurang Valley Wines, told SmartCompany the rosy picture painted by the latest figures mask a more complicated one for many winemakers.

“It’s an all embracing figure, when they say 5%, it’s not specific,” Vine says.

Vine, who has been exporting wine to China since 2007, thinks the increase is likely due to the amount of bulk wine being exported to China, which he says has recently set up more plants to bottle wine once it arrives.

He says the bulk wine bottled in China is at the “lower end of the price point” and is different from what Australian wineries had exported in the past, which was “fairly even, more in the medium price point”.

“Certain price points have increased in the Chinese market, with lower price points moving much more quickly,” Vine says.

“Medium to premium wines are moving slower.”

Vine says exports of medium to premium Australian wines, which used to be in demand from high ranking government officials, were dropping off thanks to austerity measures meaning they had to be more careful with their expenditure.

As a winemaker, Vine says he’s not exporting as much of the product from his own central Victorian vines as he’d like.

“We market ourselves on the characteristic of wine from Central Victoria,” he says.

“The wine we would be making for China we don’t have on the domestic market at all, it’s not our price point here. “

Vine says sourcing grapes from high-volume vineyards was essential to winemakers like him to meet the demand for bulk wine, which he says meant as much as 24,000 litres per container.

“Wineries are having to buy fruit from out of the region, from the Murray Valley/Riverland, and making that to get the price point.”

“So it’s causing wineries to be a bit more flexible to meet the price point.”

Vine says he’d like to see things go back to the way things were pre-2012, when he says it was a lot easier to sell premium wines in the Chinese market.

“From my point of view, some buyers are still buying but some are looking at a particular price point… it’s a very different market,” he says

 

 

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