Strong global demand for expensive Australian wine has helped local wine exports hold ground despite the COVID-19 outbreak shutting venues across the world.
New figures from Wine Australia confirm that total wine exports for 2019-20 dropped 1 per cent to $2.84 billion, with significant falls in the June and March (down 7 per cent) quarters as COVID-19 swept across the globe. It was the first decline in annual exports since 2013-14.
The value of local wine exports in the June quarter fell four per cent to $716 million but the overall numbers have been helped by consumers, especially in China, buying more expensive Australian wines.
Australia exported $2.84 billion of wine in 2019-20, with China easily the biggest export market.Credit:
Australian wines in the premium category were able to grab market share in China from French wines, partly because French wines were particularly hit by the closure of venues, while Australian wines were strong in retail and online.
Wine Australia chief executive Andreas Clark said Chinese consumers also appreciated the more affordable prices of Australian premium wines compared to French wines, and because of increased awareness of Australian wine.
The trend helped popular Australian including Penfolds, made by Australia's biggest wine company Treasury Wine Estates, and Yellowtail, owned by Cassella Family Brands. The vast majority of wine Australia exported to China is red wine.
China was again the biggest export market for Australian wine taking exports valued at $1.1 billion for the year, down 0.7 per cent on the prior year. But the value held up as the average value of wine exported to China jumped 22 per cent to $9.07 per litre due to an increase in higher priced wine exports, combined with a decline in cheaper wine exports.
The highlight of this is that we've continued to maintain China.Tony Battaglene, CEO of Australian Grape and Wine
When all markets are considered, wine exports at price points above $50 per litre surged in 2019-20, with wine between $50 and $99.99 per litre up 59 per cent to almost $300 million.
Australia also maintained its position as the biggest exporter of wine to mainland China. In the year to the end of May 37 per cent of all foreign wine imported into mainland China was Australian, ahead of France on 27 per cent.
"I think we're holding up well from an export perspective," Mr Clark said.
"Consumers are still keen to consume, it's about how you get to them, how you get the products in their hands. Some channels have obviously closed down, restaurants, bars, etcetera, but retail is still strong and vibrant," he said.
Wine companies with diverse markets and diverse routes to market were best positioned to withstand the disruptions caused by COVID-19, he said.
Australian wine export figures are closely watched by the local industry, which exports more than 60 per cent of the wine produced annually. In 2019-20 Australian wine was exported to more than 100 different countries.
The industry has also been nervously watching the recent trade tensions between China and Australia, but says it has seen no signs of problems for Australian wine exports so far.
Tony Battaglene, chief executive of Australian Grape and Wine, said the export figures were "pretty good", and exports had not suffered as badly as they could have from COVID-19.
"The UK has definitely shown some improvement, which is promising, and China has just held up remarkably well," he said.
"The highlight of this is that we've continued to maintain China, despite all the geopolitical concerns, despite all the (COVID) market problems...they still want to drink Australian wine," he said.