Good news - and bad news - for the Australian wine industry

There is good news - and bad news - for the Australian wine industry.

In the 12 months to December 2024, Australian wine exports increased by 34% in value to $2.55 billion and by 7% cent in volume to 649 million litres, Wine Australia’s Export Report released today shows.

That sounds great but the increase in value was a result of high levels of shipments to mainland China between April and December 2024, after tariffs on Australian bottled wine were removed at the end of March 2024.

In those nine months, 83 million litres of wine, worth $902 million, have been exported to mainland China.

The average value of exports to mainland China for the 12 months ended December 2024 was $10.79 per litre, contributing to a 24% increase in the average value of total packaged exports to $9.35 per litre – a record value.

But sales to key markets in the US and UK fell - with the threat of US tariffs looming.

“While there has been month-to-month volatility in the value of shipments to mainland China in the period since tariffs were removed, the performance is nonetheless very positive," said Peter Bailey, manager for market insights at Wine Australia said.

“Chinese wine consumption is much lower than it was before the import tariffs were imposed, however, so it will take more time before it becomes clear what the ‘new normal’ level of exports to mainland China will be, after this initial re-stocking period.

“Continued growth is not assured, and it is still important to focus on market diversification in a challenging global business environment.”

Outside of the unique circumstances relating to exports to mainland China, global alcohol consumption is facing numerous headwinds, and this is impacting the results to other markets.

In many established wine markets consumption is declining due to health and wellness concerns and the rising cost of living.

This has contributed to a global oversupply of wine and increased competition in already strained supply chains.

Australian wine exports to the rest of the world declined by 13% in value to $1.64 billion and 7% in volume to 565 million litres during the 12 months to December 2024.

The decline in value was largely driven by Hong Kong, after a large increase in shipments to this destination at the end of 2023 likely driven by some Australian exporters anticipating the removal of import tariffs in mainland China in early 2024.

A decline in unpackaged wine exports to the United States after a period of heightened exports further contributed to the volume decline.

Exports to North America declined by 5 per cent to $482 million, driven by the United States, with growth in exports to Canada offsetting some of the decline.

The top five destinations by value were: China (up $898 million to $907 million); UK (down $9 million to $352 million); US (down $38 million to $325 million); Hong Kong (down $125 million to $171 million) and Canada (up $13 million to $156 million).

For more information, see Wine Australia’s Export Report.

Image: Marco Simola, Scop.io