Australian wine exports show steep decline

Bad news all round for the struggling Australian wine industry.

Australian wine exports declined by 7% in value to $2.30 billion and 6% in volume to 598 million litres in the year ended June 2026, Wine Australia’s latest Export Report released today shows.

This is the first time that export volume has fallen below 600 million litres since 2004.

The decline mirrors a broader global trend of declining wine consumption over the past decade.

The total export figures reflect increasingly difficult trading conditions across many of Australia’s key export markets, driven by a historic downturn in global wine consumption.

Worldwide wine consumption has fallen to its lowest level since 1961, as consumers increasingly moderate alcohol intake, face cost-of-living pressures and shift towards alternative beverages.

Wine Australia manager for market insights Peter Bailey said the challenges facing Australian wine exporters were not unique, with other wine-producing nations facing the same conditions.

“Data from multiple sources suggests the decline in wine consumption globally is more than a short-term downturn - it's a reflection of changing consumer behaviour that is reshaping demand around the world.

"This reinforces the importance of understanding where demand exists and the products and occasions that are driving consumer decisions.

“While global trading conditions remain challenging, Australia wine continues to perform relatively well in many key markets where it generally maintained or grew its share of imported wine over the past year.”

The decline was driven primarily by weaker demand in Australia's three largest export markets: mainland China, the United Kingdom and the United States.

Mainland China remained Australia's largest export market by value, despite exports falling 15% to $756 million as the initial post-tariff recovery and restocking phase came to an end.

“While exports to mainland China declined over the past year, Australia remains the leading source of imported wine in the market,” Bailey said.

“The market is no longer being driven by the re-stocking of Australian wine, rather we’re seeing a more mature and demand-led phase, reflecting a smaller and slower-growing Chinese wine market than existed prior to the imposition of tariffs in late 2020.”

The United Kingdom remained Australia's largest market by volume and the United States second, although export volume to both markets fell to their lowest level in 25 years.

Canada was a standout performer, with export value increasing 20% to $188 million - its highest level in seven years - and volume rising 13%.

Australia making more white wine than red

Total sales of Australian wine exceeded production for the second year in a row, but there is still a lot of red wine in tanks waiting for a home.

The good news followed successive small vintages, says the Australian Wine Production, Sales and Inventory Report 2024 released today by Wine Australia.

Wine production was just over 1 billion litres, an 8% increase compared with 2022–23 but still the second-smallest reported production in 17 years, and 16% below the 10-year average of 1.24 billion litres.

Peter Bailey, manager for market insights at Wine Australia, said that the below-average production from the small 2024 vintage was the result of a combination of seasonal factors and economic and market conditions.

“This was another difficult season in many regions, with heavy rainfall and flooding, widespread windy conditions affecting flowering, and dry spring weather leading to cold nights and the potential for frost damage,” Bailey said.

“However, the result has also stemmed from deliberate decisions by grape growers and wine businesses to reduce production or intake, driven by the current economic and market conditions affecting demand for wine.”

The overall increase of 8% cent compared with 2022–23 was made up of a 20% increase in white wine production, partly offset by a 2% decrease in red wine production.

This saw white wine’s share of production increase from 46% to 51% - the first time in 12 years that the production of white wine has exceeded that of red wine in Australia.

Bailey said that this change reflected adjustments made by the sector to counter the oversupply of red wine that had arisen over the past three years.

The total volume of sales of Australian wine in export and domestic markets was 1.08 billion litres - a decrease of 1% compared with 2022–23, with both domestic and export sales showing very small declines.

Bailey said growth in red wine exports was driven by the re-commencement of exports to mainland China following the removal of import tariffs in late March 2024.

“It will take some time before there is a clearer picture of how Chinese consumers are responding to the increased availability of Australian wine in–market,” Bailey said.

“Any increase in production is likely to result in stock levels rising again, unless there is a corresponding increase in sales. This is a particular concern for reds, where the stock-to-sales ratio is still well above the long-term average.”

Bailey noted that the global outlook for Australian wine remains challenging. 

World wine consumption has continued to decline over the past 12 months and is expected to decline further in the next five years, driven by economic constraints, overall alcohol moderation trends and competition for wine from other beverages.

Image: Elena Pasenko, Scop.io