Brand Australia posts exports jump

26 January, 2016

Wine Australia has announced that its exports have jumped 14% to AUS$2.1 billion in 2015, the highest growth in value since October 2007.

The results were revealed at the Australia Day Tasting in London today (January 21).

Wine Australia CEO Andreas Clark also reported that Australian wine exports had grown in each of the country’s top 15 export markets in the year to December 31, 2015. The largest leap was in China, Australia’s third largest market, with a jump of 66% to $370 million.

The US, Australia’s number one export market, was up 4% to $443m. The UK, Australia’s largest market by volume, grew by 0.2% to $376m. After China, Canada posted growth of 7% to $193m and then Hong Kong with 22% growth to $132m.

The Wine Australia Export Report December 2015, showed that the value of exports increased at each price point, the largest increase being with wine with a free on-board (FOB) value of more than $10 per litre. Sales of these wines grew by 35% to a record $480m and make up 23% of the value of Australia’s wine exports.

The report says bottled wine has been the key driver of the export growth. Bottled exports increased by 17% to $1.6bn and the average value increased by 7% to $5.20 per litre.

Clark told Drinks International that Australian wine shipped in bulk makes up 56% of total volume with the ratio for exports to the UK, being 84%. He suggested that that may shift back as the weakening Australian dollar due to the faltering Chinese economy, means that the cost benefit may switch back to bottling in Australia.

Asked why China has posted such a significant growth, Clark said it was down purely to the Chinese discovering wine and starting the journey. He said: “The room (at a recent tasting in China) was full of young people, keen to know about wine. It is all part of the westernisation of the Chinese.

“Australia has a good reputation as a country in China. They see it as clean and green with fresh fruit and vegetables, dairy and seafood. Se we are seen as credible and reliable.”

He said Treasury with its Penfold’s brand and its iconic Grange wine had posted significant growth. With the absence of any market research information, Clark said the challenge was to find out where the wine was going and who is drinking it.

He described the US market as “like gorilla warfare” with Australia up against the traditional European wine producing countries which had “big budgets with subsidies from Brussels”.

Earlier Accolade Wines’ Jane Robertson and Rob Harrison outlined how tough the UK market has been. With Australia being the overall number one country with a 22% share, it has been used by the major multiple retailers to drive footfall into their stores via deep discounting and half price offers. With Australia languishing at around the £5 price point, they said the challenge was to get UK wine drinkers who like Australian wine to pay more.

Australia is also poorly represented in the on trade, except of course in native Australia. This is partly explained by the nationality of the majority of restaurants, probably worldwide: French, Italian, Spanish, Chinese, Indian and American.  Nevertheless in the US and UK in particular, Wine Australia has what Clark described as a “suite of activities”, such as tastings, masterclasses food and wine matching, to raise awareness of Australian wine and emphase single varietals and regionality.

Wine Australia’s UK and European regional manager, Laura Jewell MW, told Drinks International that she and her colleague, Emma Symington MW, are going to work with agencies and importers to conduct tastings with sommeliers and restaurateurs in an effort to get more Australian wine on to wine lists.

Keywords: wine australia

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