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Wednesday 31 January 2024

Australian wines losing their global appeal

More bad news for the Australian wine industry today with news that exports declined by 2% in value to $1.90 billion and 3% in volume to 607 million litres in the 12 months to December 2023.

The Wine Australia Export Report released today said that although these figures are an improvement on than those reported in the September 2023 Export Report, the results are still well below long-term averages.

Particularly disturbing will be major falls in sales in the US, a declining market for Australian wines.

Wine Australia manager for market insights, Peter Bailey said that Europe and North America drove the reduction in Australia’s export value over the year, declining by 7% and 12% respectively.

“In Europe, exports to the top 15 markets declined in value as the region suffers through higher inflation rates than North America and Asia, as well as supply chain issues," he said.

"This includes the United Kingdom, Australia’s largest export market by volume. Pleasingly, Australia’s exports to the UK grew in volume for the first time since mid-2021.

“Both the United States and Canada contributed to North America’s decline in value. In 2023, packaged shipments to these markets continued their decline and unpackaged shipments, which were growing strongly, have started to ease off.

“The decline in exports to Europe and North America has resulted in their share of export value dropping to 29 and 27% respectively. Meanwhile, Asia’s share of export value has grown to 37%.

“Hong Kong and Singapore were stand out destinations for Australian wine in Asia, driving the growth of value to the region. Further, the number of exporters to Hong Kong also grew – up 138 export businesses to a total of 531 in 2023. Hong Kong and Singapore are key trading hubs in the Asian region and, as such, some of the wine is on-shipped to other markets.”

The decline in Australia’s exports comes at a time when most wine producing countries are reporting decreasing sales, Wine Australia says.

The global alcohol market is softening and impacting the entire wine category, especially in mature markets. This trend has been attributed to a combination of global economic tightening resulting in less discretionary spending and consumers being more conscious of their health.

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