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Tuesday 15 March 2022

Meet the Big 4 who control over a third of Australian wine sales

Four major companies control well over a third of the Australian wine business, research by Savvy has revealed. 

The four major producers are led by Treasury Wine Estates Ltd with a market share of 13.5%. They produce some of Australia’s best-known premium brands including Penfolds, Wolf Blass, Lindemans, Seppelt, Wynn's Coonawarra Estate, 19 Crimes and Rosemount Estate.

Accolade Wines was in second position in terms of 2020 total wine production. Its brands include Hardys, Grant Burge, St Hallett, Petaluma and House of Arras. 

Casella Wines Pty. Ltd., in third position as of 2020 in terms of total wine production. It has a share of  7.7% of the market with wines including Yellow Tail. 

Pernod Ricard Pacific Holdings has a 7% market share and is the subsidiary of French luxury spirits and wine group Pernod Ricard SA. It owns Jacob’s Creek and St Hugo.

Underneath the Big 4 are medium-sized wine companies including Australian Vintage Limited (4% share), Kingston Wine Estates and De Bortoli Wines. 

Bill Tsouvalas, finance expert and founder of Savvy, says: “While the fundamentals of the wine business remain good, the industry has really been impacted by first the China trade tariffs and now the ongoing pandemic. 

"This has been reflected in the decline in business equipment lending we've seen in that sector, compared, say, to the craft beer market, where producers are increasing in number and expanding production capacity.

"But this may have as much to do with the comparative maturity of the industry - Australian wine producers have been established much longer and probably now have excess production capacity."

Wine Australia says that in the year ended December 2021, Australian exporters shipped wine to 112 markets, compared with 114 the year before. 

Red wine production leads the way in the Australian wine industry, comprising 59.5% of all products, followed by white wine on 32.2%. 

IBISWorld says the Australian wine industry is worth $6.9 billion, taking in $409.8 million in profits as of the final quarter of 2021. This represents a 5.9% profit margin for producers and wineries.

# Savvy is one of Australia’s largest online financial brokers.

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