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Wednesday 3 November 2021

Why wine exporting is a fiercely competitive business

With Australia exporting around 60% of the wine it produces, it is in fierce competition with Italy, France, Spain, the US, Argentina, Chile and South Africa for overseas sales. 

To assist Australian wine producers to better understand the competitor landscape, Wine Australia has prepared a new report called Global Wine Production Competitor Analysis

It is a high-level overview of the main wine producing countries in the world and pulls together information from various data sources to summarise the profile of these countries as wine producers and exporters, and how they are positioned relative to Australia in key export markets.

Over the past decade, global wine production varied between 24.8 and 29.4 billion litres. 

In 2021, wine production was estimated to be 25 billion litres. Australia’s share over the period hovered between 4% and 6% and generally ranks the country as either the fifth- or sixth-largest wine producer in the world. 

By far the biggest wine producers are Italy, France and Spain. Combined, they account for between 46 to 52% of global production, depending on the year.

Changes in production in each of these three countries has a significant influence on global supply. For example, wine production for each country increased by around 1.2 billion litres in 2018, which to put in context, is how much Australia produces in an average year.

The top three exporters by volume are Spain, Italy and France, with a 54% share in the latest year. 

The US and Argentina are far less focused on exporting than the other major producers. The US exports on average exports about 15% (maybe because a lot of its wines are either awful or prohibitively expensive). 

Within Australia’s major export markets, Italy has its biggest volume share of imports in Germany, the US, Sweden, Denmark and the United Kingdom. It generally has lower market shares in the Asian markets. 

In contrast, France’s largest share of exports are to Asia: Singapore, Hong Kong, Taiwan and Japan.

Spain’s largest volume share among Australia’s key markets is in Germany, followed by South Korea, Japan and Denmark.

The US’s biggest share of imports is in neighbouring Canada. South Korea is the only other destination where it has a double-digit share.

Asia is where Chile is most dominant, with its biggest shares in Japan, South Korea, Thailand and Malaysia.

Argentina’s share of imports in Australia’s major markets is generally at 5% or lower, with its largest share in Canada at 8%.

Similar to Argentina, South Africa does not have a double-digit volume share in any of Australia’s major destinations. South Africa's largest share is in New Zealand at 8%, where Australia holds sway with a 66% share.

To discover more insights into each of the competitor producers, download the report here.

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